AI is not taking white collar jobs

There's a far more plausible explanation, and if anything, AI will be a job-creator

Publishing note: Random Walk is going to experiment with a different publishing cadence over the next few weeks (more details forthcoming). I will endeavor to trade some frequency for depth, at least some of the time.

• AI is not taking white collar jobs, but white collar jobs are indeed still stagnant

• if AI startups are getting all the funding, and startup hiring is flat, does that mean AI is killing jobs or making them?

• posted wages tell a story, but it’s tougher on the minions than the higher-ups (or is it)?

• NYC has a surfeit of “good jobs,” but plenty of “not good jobs”

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AI is not taking your job

“AI is taking white collar jobs” is a thing people are saying, but they’re very probably wrong.

The claim focuses on the increasingly difficult hiring market for entry-level white collar workers, recent college grads, MBAs and the like. The observation is correct—it is hard for new- and re-entrants to the job market (and hiring is generally slow)—but it’s been correct for a while, and you’d probably only attribute it to AI, if you only started paying attention recently.

So what is putting pressure on white collar hiring?

Random Walk isn’t going to rehash the whole thing right now, but the gist of my theory is White Collar Stagnation (which is a byproduct of No Exits for Private Capital). Tl;dr, if the “knowledge economy” (and its biggest paydays) are linked to the intermediation of capital, then when capital got (and stayed) relatively scarce, the knowledge economy jobs (and its paydays) would get scarce, as well.

I can’t prove it, but it makes sense, it’s been my theory for a while, and it shows up in the data. Plus, becoming a lean, mean profit-generating machine is generally not associated with lots of hiring (at least not at first).

The other thing to note is that the end of the White Collar tailwind (i.e. free money) preceded the end of the Blue Collar tailwind (i.e. the Labor Shortage) by ~1 year.

But now both tailwinds are over, albeit for different reasons, and hiring is slow for everyone, and AI ain’t got nothing to do with it.¹

If anything, I would expect AI to increase hiring because that’s what great productivity breakthroughs tend to do.

I mean, if you think e.g. startup hiring is depressed because AI (and not because VCs simply have less money to throw at startups), then idk what to say:

Carta

Startup headcount has been flat for ~2+ years.

Must be AI (which gets ~70% of the funding) that froze hiring, and not the sudden rise of interest rates that turned the capital spigot to “off.”

Anyways, without debating the cause too much, at present, here are two vignettes on the state of White Collar Stagnation.

White collar postings (and wages) have stagnated more

First, white collar job postings have declined more sharply yoy: