Fed chair Powell says AI is coming for your job • The Register

It may not happen today or even tomorrow, but US Federal Reserve chair Jerome Powell is confident that someday soon AI is going to seriously change the US economy and labor market. 

Speaking to the US Senate Banking Committee on Wednesday to give his semiannual monetary policy report, Powell told elected officials that AI’s effect on the economy to date is “probably not great” yet, but it has “enormous capabilities to make really significant changes in the economy and labor force.”

Powell declined to predict how quickly that change could happen, only noting that the final few leaps to get from a shiny new technology to practical implementation can be a slow one. 

“What’s happened before with technology is that it seems to take a long time to be implemented,” Powell said. “That last phase has tended to take longer than people expect.”

AI is likely to follow that trend, Powell asserted, but he has no idea what sort of timeline that puts on the eventual economy-transforming maturation point of artificial intelligence. 

“There’s a tremendous uncertainty about the timing of [economic changes], what the ultimate consequences will be and what the medium term consequences will be,” Powell said. 

Powell’s belief that AI isn’t yet causing massive changes to the labor market has been shown in a recent study that found the technology isn’t yet replacing jobs or depressing wages. But there’s also evidence to suggest whatever trickle effect AI may be having is beginning to gain speed. 

UK telecom giant BT announced plans in 2023 to cut 42 percent of its workforce (around 55,000 people) by 2030, and said last week that AI might enable even greater reductions. Anthropic CEO Dario Amodei, meanwhile, expressed concern that AI might be coming for entry-level white collar workers, eliminating as many as half of those positions in the next five years and as much as 20 percent of the broader labor force. 

Salesforce CEO Marc Benioff said in a Thursday interview on Bloomberg’s The Circuit that AI is already doing “30 to 50 percent of the work at Salesforce now,” and that he expects workforce cuts to be ongoing as he turns his operation into one powered by AI agents. 

“We’re looking at productivity levels of 30 to 50 percent this year in key functions like engineering, coding [and] support,” Benioff said. “I think that will continue.” 

That continuation will be watched by the Fed, Powell told Senators, but that doesn’t mean he’ll have the power to do anything about it. 

“The Fed doesn’t have the tools to address the social issues and the labor market issues that will arise from this,” Powell said. “We just have interest rates.” 

In other words, someone else is going to have to actually act to prevent the worst of the potential economic AI fallout, Senators. ®