‘White collar' jobs are down — but don't blame AI yet, economists say

CNBC

17 hours ago

While there hasn't been much hiring for so-called "white collar" jobs, the contraction is not because of artificial intelligence, economists say. At least, not yet.
Professional and business services, the industry that represents white-collar roles and middle and upper-class, educated workers, hasn't experienced much hiring activity over the past two years.
In May, job growth in professional and business services declined to -0.4%, slightly down from -0.2% in April, according to the Bureau of Labor Statistics. In other words, the sector has been losing job opportunities, according to Cory Stahle, an economist at job search site Indeed.
Meanwhile, industries like health care, construction and manufacturing have seen more job creation. In May, nearly half of the job growth came from health care, which added 62,000 jobs, the bureau found.
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However, economists have said that the decline in white-collar job openings is more driven by structural issues in the economy rather than artificial intelligence technology taking people's jobs.
"We know for a fact that it's not AI," said Alí Bustamante, an economist and director at the Roosevelt Institute, a liberal think tank.
Indeed's Stahle agreed: "This is more of an economic story and less of an AI disruption story, at least so far."
There are a few reasons AI is not behind the declining job creation in white-collar sectors, according to economists.
For one, the decline in job creation has been happening for years, Bustamante said. In that timeframe, AI technology "was pretty awful," he said.
What's more, the technology is even now still in early stages, to the point where the software cannot execute key skills without human intervention, said Stahle.
A 2024 report by Indeed researchers found that of the more than 2,800 unique work skills identified, none are "very likely" to be replaced by generative artificial intelligence. GenAI creates content like text or images based on existing data.
Across five scenarios — "very unlikely," "unlikely," "possible," "likely" and "very likely" — about 68.7% of skills were either "very unlikely" or "unlikely" to be replaced by GenAI technology, the site found.
"We might get to a point where they do, but right now, that's not necessarily looking like it's a big factor," Stahle said.
While AI has yet to replace human workers, there may come a time where the technology does disrupt the labor force.
"Certainly, jobs are going to transform," Stahle said. "I'm not going to downplay the potential impacts of AI."
Stahle said that openings for consulting jobs focused on implementing generative AI have been rising. Over the past year, management consulting roles with AI language accounted for 12.4% of GenAI postings, showing signs of growing demand, per a February report by Indeed.
A separate report by the World Economic Forum in January forecasts that by 2030, the new technology will create 170 million new jobs, or 14% of the current total employment.
However, that growth could be offset by the decline in existing roles. The report cites that about 92 million jobs, or 8% of the current total employment, could be displaced by AI technology.
For knowledge-based workers whose skills may overlap with AI, consider investing in developing skills on how to use AI technology to stay ahead, Stahle said.