New report claims AI is leading to job redundancies – but higher-educated workers are hit hardest

Report claims, tech sector grads and workers continue to see AI-induced layoffs
New unemployment tracker lays the foundation for future employment laws
Despite layoffs, there are still new job opportunities elsewhere

A New California Policy Lab report has revealed that artificial intelligence could actually lead to a number of layoffs, despite recent promises that the technology is creating new roles.

But the data suggests that certain roles are more receptive than others. Those with a bachelor’s, master’s or PhD in highly AI-exposed roles experienced higher unemployment after ChatGPT was released in late 2022.

Unemployment insurance claims among bachelor’s degree holders increased by more than 50% between November 2023 (13,000 claims per month) and July 2023 (22,000 claims per month). Claims have since declined, but remain above previous levels and currently stand at around 16,000 claims per month.

AI still causes some job losses

And California leads the way for AI-induced layoffs, with the Bay Area’s high concentration of tech companies making it a likely place where labor market effects could first emerge.

But the report is broadly optimistic about AI’s impact on roles – while certain roles are clearly at risk of displacement, other roles still hold promise for human workers.

“AI does not appear to have affected national unemployment rates… but has affected the number of employees in certain occupations with more exposure to AI,” the paper concludes.

Although region-specific, the report marks the introduction of the California AI-Unemployment Tracker (CAIT) using near-real-time data, which it says is important for guiding employment laws and support as AI’s impact on the labor market continues to evolve.

Ultimately, the paper concludes, higher-level workers will be affected first, especially in California’s tech sector, but the overall impact on the labor market may be more displacement than replacement.

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