Emily Florence Rowe

The Future Effect of Artificial Intelligence on Job Displacement and Mental Health

Today, Artificial Intelligence (AI) is rapidly developing across the globe, changing the world from “the Age of Information” to “the Age of Intelligence,” as many recent publications have noted (Jianhua 347; Occhipinti, “Navigating” 1). With the invention of AI, employees often fear for their future in the workforce. According to Alexei Alexis, a journalist and reporter for CFO Dive, “Twenty-eight percent of respondents expressed concerns about the possibility of their job being reduced or replaced by AI.” If AI can perform tasks faster and more efficiently, many are concerned about the next steps to take if they lose their job (Staglin); low-income employees are particularly vulnerable to job displacement as AI automation will eliminate many of their jobs. The mental health of families could be severely affected. With the rapid growth of college costs and inflation, money has remained a worry even without job displacement. Now, with self-driving cars such as Waymo (Davies 9) and implications for manufacturing becoming more automated (Soldatos v), important questions are raised about the future: Not only is it about what effect artificial intelligence will have on jobs, but what are the implications for mass numbers of people now facing the emotional toll of sudden unemployment? How will their mental health be impacted, and is there any way to mitigate this and leave people more emotionally resilient? In scholarly journals, recently published books, and articles, I have found discussions of economists and sociologists about the looming effects of AI on job displacement, with significant mental health implications. From this information, I will present a solution as to how policies in the workforce and in government can best be adjusted to address the mental effects of job displacement due to AI. 

The example of how self-checkout machines have ultimately affected cashiers at grocery stores is probably how most people foresee AI’s effect on jobs. According to Robert Brodo, a business consultant, self-checkout systems reduce the need for cashiers, leading to lower labor costs. The self-checkout system has been extremely popular and has positively impacted grocery stores. Self-checkout machines serve as a preview of the effects of artificial intelligence on lower-paying jobs. These self-checkout systems have been installed all around the world because they allow people to purchase groceries more quickly. Similarly, this will happen as many other companies rely more on artificial intelligence. Those who are employed at places such as grocery stores, are most at risk for job displacement (Ritzer 7). Every gain in technology produces a human cost. The question is whether we can reduce the cost.

How extensive is the cost? Economists are modeling job loss scenarios that show how artificial intelligence will potentially lead to widespread economic disruption overall (Ford 13). It is clear that those with lower incomes and lower access to higher education face heightened vulnerability. First, because AI can perform easy tasks more efficiently, the majority of the jobs that remain will require a masters and bachelor degree (Lu and Zhou 1057). These employees can perform more complicated tasks that AI is unable to do, while the less educated are left with fewer job opportunities. 

Perhaps displaced individuals could pursue higher education to remain competitive for jobs, but moreover, attending college and working for these degrees is only becoming more expensive. Emily Withnall, a writer for The New York Times, explains that the rising cost of college and graduate schools makes it difficult for people to afford these degrees. Due to the significantly rising cost for college, those who cannot afford this kind of cost are beginning to ask whether college is truly worth the debt. In her article, “For Some Young People, a College Degree Is Not Worth the Debt,” Withnall discusses the story of a college student, Soleil Rell, who had to pay for college after experiencing the hardships of the pandemic and losing her scholarship due to a drop in the required GPA. She ended up dropping out of school due to the toll that it took on her mental health to face the amount of debt that she would need to continue her education. As the cost of college continues to rise, more people choose to refrain from attending college in order to avoid debt (Withnall). Meanwhile, as AI begins to take over the workforce, the need for a college and/or masters degree becomes more crucial for job eligibility. What used to be essential for a certain kind of job is now increasingly out of reach.

While economists are predicting these pervasive job losses, sociologists are also studying the impact of rampant job loss, as well as the fear of impending job loss even before it occurs, on mental health (Occhipinti, “Navigating” 3). People in constant risk of losing their jobs to AI can feel anxiety that ultimately affects their overall performance on their job (Staglin). Job loss itself can also affect their mental health because of anxiety about how they can provide for themselves and/or their family (Brand 362). Then, because jobs are already competitive, it can be difficult for people to find an alternative job, especially when artificial intelligence is adding on to the competitiveness of employment (Occhipinti, “Navigating” 2). Beyond the individual impact, sociologists are also discussing the impact of wide-spread unemployment on the social fabric of society. With rising rates of unemployment, social instability can significantly impact society (Brand 365). It’s a double bind, where both the fear of job loss and the actual loss of jobs reinforce each other. 

While the change will undoubtedly have broad social impact, as Artificial Intelligence eliminates jobs, workers of lower income families will experience heightened vulnerability not just because they are more likely to lose their jobs, but because their financial status makes them more prone to psychological stress in general. In “Less Money, More Problems: Financial Stress and Psychological Harm among Vulnerable Workers,” Annabel Stattelman-Scanlan, a Research Assistant who belongs to Family and Financial Well Being Division at the Urban Institute, explains that, “Financial worries are more likely to be accompanied by even higher psychological distress for those who are low income, unemployed, renters, or unmarried” (Stattelman-Scanlan). Because they come from lower income families, they already have the stress of making sure that they can get by and have enough money to cover essential living expenses. This emphasizes the sense of urgency that we need to have to improve this issue of job displacement. While this issue can still affect mentally higher income families, lower income families are already experiencing mental and financial stress even before being affected by Artificial Intelligence. 

As AI continues to take over different jobs, the workers that will be assigned to other jobs within the company are those who are resilient, highly-educated, and equipped with strong skill sets, increasing the dichotomy between lower-income and middle- and upper-income people. According to their article, “A review on the economics of artificial intelligence,” Yingying Lu and Yixiao Zhou, Professors of Economics at Australian National University, explain that “automation replaces low-skilled labor and increases demand for workers with higher skill levels. Automation may exert upward pressure on income inequality, at least in the short run. Therefore, access to high-quality education becomes more important.” However, this is easier said than done. Lu and Zhou fear that, “If there is strong inequality of opportunity, income inequality could worsen over generations” (Golley et al. 46-47; Lu and Zhou 1058). By attending college and being eligible for higher-paying jobs, people can connect with their co-workers and the alumni of the school they attended. Because of these connections, people in this position will be more likely to find other jobs if they are replaced by AI. 

Just by attending a well-known university, job opportunities abound. According to Patricia Cohen, a global economics correspondent for The New York Times, “For seniors graduating from the University of Michigan this month, employers have been lining up since the fall to offer interviews and boast of their companies’ benefits.” When companies search for these previous students and want to keep them as company employers, those without this level of education face even greater competition. Cohen asserts, “Younger workers have always had a tougher time finding a job than their older, more experienced counterparts. Even so…economic recovery has progressed more slowly for young high school graduates than for those coming out of college.” Once again, lower income families are extremely vulnerable to the effect of AI on job displacement. 

Though low income individuals are likely to have their mental health most impacted, not only people with lower income or who are underprivileged have concerns. People from higher education and current college students share similar concerns on how AI will affect the workforce. Drew Hemmesch and Isabella Mitrano, students at the University of Notre Dame, want to know which fields will be most affected by the development of AI. They know that employers will look highly upon their degrees. Because of Notre Dame’s strong alumni network, its numerous resources for students to explore and learn more about different career paths, and its highly respected career services, students coming from Notre Dame have a high chance of getting a good job right out of college. According to the Undergraduate Career Services, “[w]ith a degree from the University of Notre Dame, the opportunities are endless.” Even with these advantages, students at this renowned university are worried for their own future as a result of AI and its potential impact. They want to know the steps they will need to take before entering the workforce so that they can adapt to the changes that AI will bring. Others worry about the effect on the generations to come. Alex Rowe, a mother of three, says she is “concerned about the effect that this will have on educated/lower income people and how artificial intelligence will affect younger people and their future careers.” Rowe explains how it has always been important to her for her kids to be successful. She worries about the stress that this will bring to her children’s lives when they are trying to support themselves in the future. Because of her concern for her children’s mental health as well as the mental health of the people of future generations, she states, “I want to know specifically what kind of impact Artificial Intelligence will have so that I can best prepare my own children for these effects.” Discussion of the AI problem has spread from the academic realm to ordinary citizens.

While most economists predict significant job loss, some people believe that AI will create a more prosperous economy. According to Goldman Sachs, a well known investment company, researchers believe that with the rapid development of AI, “these tools using advances in natural language processing work their way into businesses and society… could drive a 7% (or almost $7 trillion) increase in global GDP and lift productivity growth by 1.5 percentage points over a 10-year period” (“Generative AI”). Because AI can perform these tasks more efficiently, work moves at a faster pace, and more accurately. Similar to the Industrial Revolution, more machines were invented, factory workers completed their tasks much more quickly, leading to economic growth. Because of these predictions, many people believe that the positive impacts of Artificial Intelligence will outweigh the negative effects as the economy will continue to prosper as AI is continuously developed.

However, predictions of a healthy stock market do not negate the real problem of mass unemployment. So, what can be done about this? Fred Krimmelbein, a Data Governance Manager at Freddie Mac writes, “Addressing the ethical implications of AI-induced job displacement requires a mutil-facted approach that involves governments, businesses, educational institutions, and society.” According to Krimmelbein, governments and companies will need to jointly address this issue properly to avoid major effects on the workforce. By understanding the specific effects of AI on mental health, the private sector and the government can create policies that best address these effects and reduce their impact (Occhipinti, “In the Shadow” 8). Additionally, AI can potentially negatively impact one’s mental health for those who find purpose through their career. Occhipinti states that, “Quality work has long been recognized as a fundamental pillar of prosperity and mental health, providing not just financial security and a sense of identity and purpose, but fostering social connection and integration -- all of which are fundamental to a thriving society” (Occhipinti “In the Shadow” 1). Through a career, people can pursue something that they are extremely passionate about, which allows them to find joy and develop their sense of purpose. People desire to impact the world in their own way and often through their career. However, if AI takes away their jobs, they will not be able to impact the world through their job. This has a major effect on one’s mental health, because they do not feel like they can achieve their true desire for success (Staglin). By taking this into consideration, the government and private sectors can figure out ways to ultimately help defeat the negative effects of AI on the workforce (Occhipinti, “In the Shadow” 8). This will allow for American citizens to overcome the mental challenges that come with the development of AI. 

Rather than allowing the negative effects of AI to control the workforce and opportunities for employment, corporations and the government can plan and adjust to job displacement. While this topic sparks a lot of controversy, we can consider these suggestions before finalizing how to address the impacts of AI on the workforce. One potential option could be reskilling. Valerie Singer, the Manager of AWS’s Education Team, and Vishaal Gupta, who is a part of Pearson’s Workforce Skills, explore different ways that companies can address such effects through “reskilling and redesign.” Singer and Gupta state that “Reskilling and upskilling programs focused on digital skills training can help employees develop tech literacy and embrace new technologies.” By re-skilling current employees, they can learn to use AI to perform their task more efficiently. Karen Levy and Pegah Moradi from the Department of Information Science at Cornell University, share similar beliefs of the importance of “retraining displaced workers to provide them with marketable skills for the new economy; bolstering the social safety net through reforms to unemployment insurance and public benefits programs” (Levy and Moradi). This reskilling will allow people to develop new skills in following the changes at the company as it becomes more reliant on using AI. Additionally, Gupta and Singer explain that “[a]s routine activities become automated, employers should redesign roles to focus on work that only humans can do.” Through redesign, companies can change the scope of their work and how they use their employees’ skills. By giving them tasks that AI has not yet developed, these employees can still keep a job but within a different area of the company. Thus the company will prosper as well, because progress will be completed at a much more efficient rate. The company is improved as a result of the efficient performance of AI, and employees keep their current jobs. This training could be offered by programs that are created by government and corporations. Ultimately, this will alleviate the mental stress of the development of AI, because employees will be relieved that they can be trained to adapt to these changes and keep their jobs. 

In addition, the government could address the financial effects of job displacement caused by AI by improving Universal Basic Income (UBI). UBI is a set amount of money that people receive to alleviate poverty (Peters). Futurist and author Martin Ford states, “[W]e will have to find a way to restructure our economic system, and that will likely involve decoupling income from traditional jobs” (Ford 15). Because AI is continuously developing rapidly, Ford believes that we will have to change the way our economy operates. In today’s society as well as in the past, working people have made money primarily by having a job. Because people will likely be losing their jobs to AI, they will need some alternative ways to support their families. Also, inflation is always an issue. If we are going to allow AI to replace people to complete tasks, we must find alternative ways to help people to make money. 

As I mentioned earlier, lower income families still have their own financial worries, regardless of the development of AI. According to Stattelman-Scanlan, “Both financial worries and psychological distress are higher for those who are women, less educated, low income, unemployed, renters, or unmarried, compared to their counterparts. A higher proportion of these groups state that they are concerned about paying for costs such as housing, medical care, and monthly bills” (Stattelman-Scanlan). A potential readjustment of UBI will provide these people with a sense of relief, because they can use these funds to cover other important elements to their survival such as healthcare, housing, and food. This, in turn, will help them to steer their focus towards finding employment and preventing them from falling into poverty. 

While some people believe that readjusting UBI to help alleviate both the mental and financial effects that job displacement will have on lower income families, many people take a stance against this and believe that providing UBI will only make things worse. Some believe that it is wrong of the government to willingly pay people who are not employed and are not trying to find a job. They do not believe that it is worth its drastic effects on the economy if these people are not actively seeking employment. Robert Greenstein, the President Emeritus of the Center on Budget and Policy Priorities, asserts, “In our political culture, there are formidable political obstacles to providing cash to working-age people who aren’t employed, and it’s unlikely that UBI could surmount them.” People fear what would happen to the economy if the government decides to hand out money to those who are unemployed. By providing UBI, people are concerned that it would have a harmful effect on other platforms such as “Medicaid, child care assistance, assistance in meeting high rental costs” (Greenstein). When the government needs a certain amount of money to support UBI, some funding for other platforms will suffer. While it may solve the financial and mental effects of AI’s job displacement, other effects on the economy may be severe. 

Many people believe that if the government willingly gives money to the unemployed, some of these people may try to survive off the money given to them and avoid seeking employment. According to the article, “Five Problems with Universal Basic Income,” Rachel Minogue, an Economic Fellow, states, “With a foundational, albeit limited, income under UBI, some Americans may choose to work part-time instead of full-time. Others may leave the labor force for years when they would have otherwise worked.” The amount of money that the government would allocate to these people is just enough for people to get by without the need to seek employment for a significant amount of time. Some Americans fear that this drastic effect will harm the economy overall and America will have more problems to worry about along with job displacement. With the amount of money being given to the poor, this money needs to be replaced through taxation. However, because of the risk of people being unwilling to find employment because of UBI, this will have an effect on the taxation of American citizens. Minogue shares a similar viewpoint when they state, “UBI has the potential to directly decrease the growth of the US economy, namely GDP growth, through reductions to labor force participation. With GDP shrinking, tax revenues would fall.” This would harm the economy, because the government would receive lower tax revenues and would struggle to maintain its funding of other essential programs to sustain the economy. Overall, many people do not believe that readjusting AI will be the most effective solution to solving the problem of job displacement because of the risk of the economy worsening and the rate of unemployment rising even more.  

Yet, relief programs often worked well in the past. In 2019, the world was hit with the COVID-19 pandemic that inflicted tragedy on the world. Governments issued worldwide lockdowns, causing people to remain in their homes and businesses; restaurants, and stores were forced to close at least temporarily. As a result, many people lost their jobs because many of these jobs could not be completed from home. This had a drastic effect on employment, causing the rate of unemployment to “reach 14.8%—the highest rate observed since data collection began in 1948 in April of 2020” (Falk et al). In response to this, the government issued “direct cash payments to address the economic impacts of the COVID-19 Pandemic” (Boyle and Carter). These payments allocated a certain amount of money to families to “allow them to spend more and stimulate the economy and meet basic needs for those whose income decreased due to COVID-19” (Boyle and Carter). These payments helped steer families away from poverty and to keep them on their feet until they could find employment again. While universal basic income is a highly controversial topic, the effectiveness of the pandemic relief programs support the idea that readjusting UBI could be an effective solution to mitigate the effects of AI job displacement. 

An interesting opportunity arose at the same time people were quarantined in their homes, with students attending virtual classes via Zoom. Many families could not afford Wi-Fi in their homes and tablets for their children to continue their education online. In response to this, Apple Inc. donated computers to many lower income families to help them continue with their education (Cook). Tim Cook, the president of Apple, stated that “Apple’s committed donations to the global COVID-19 response — both to help treat those who are sick and to help lessen the economic and community impacts of the pandemic — today reached $15 million worldwide” (Cook). While this may appear as a futuristic approach, the government could collaborate with Apple to create robots that are powered and run by Artificial Intelligence. These robots could be designed to teach people how to better use AI in their daily lives. The robots can have different settings that allow the robot to reach different audiences such as young children, elderly people who don’t understand how technology works, and adults. The robots can live in the home of its owners to help people learn how to adapt to the ways of Artificial Intelligence. For people who cannot afford these robots, Apple can work with the government to donate these robots to lower income families across the globe to ensure that no one will fall behind and everyone will adapt to the drastic changes that AI is inflicting on our world. With these robots, we can quickly adapt to the changes that AI is bringing. Rather than allowing AI to have a negative impact on the world, we should embrace this new development and incorporate it into our daily lives, because eventually the future is only going to become more reliant on technology. There is no going back; Artificial Intelligence is never going to go away. We must be resilient and ensure that we can help as many people as possible to learn how to work and operate AI. By doing this, people will be able to bring these skills to their own job and know how to operate AI within the scope of their job. This will prevent people from losing their jobs and will create a workforce that is more efficient and prosperous. 

This innovative robot goes beyond just the potential of improving the rate of job displacement that AI causes. It also alleviates the mental effects of this new form of technology on people. With these robots, people will no longer have to worry about having to compete with AI. They will ultimately work together with AI to create a more prosperous economy, as these AI powered robots will teach them how to implement AI in their daily lives. These robots will teach the humans the skills they need to be the best asset they can be to employment and learn how to live a life that uses AI. These robots will allow for Artificial Intelligence to be a positive technological addition to society in every given area of the workforce and the economy. It will no longer be seen as a burden to one’s mental health because it will aid them to help become a crucial part in the workforce with their knowledge of how to properly use AI. Together, they will be a force for good in the world. 

Those best equipped to adjust to the rapid development of AI are Generation Z. They were introduced to technology from a very early age. From the iPod to the improvement of phones, laptops, and iPads, Generation Z has seen it all. Occhippinti shares a similar viewpoint. She states that, “[Y]oung people could be empowered through public-private partnerships that support social production and intergenerational exchange to become the “city builders” of our new Age of intelligence” (Occhipinti, “Navigating” 3). The young generation can overpower the negative effects of AI. As a nation, we could implement and develop the technological version of the “New Deal.” 

After the Great Depression, economic and social reform was needed to make the United States regain its prosperity. President Franklin D. Roosevelt created the New Deal with reform programs to help Americans recover from the awful effects of the Great Depression. Similarly, today, the government could create training programs that the private sector could implement into their companies to help people become more equipped with skills on how to manage AI. Because Generation Z is extremely familiar with how AI works and understands how to properly use AI efficiently, the private sector could offer internships to help people learn how to use AI. These internships could be designed for high school and college students who could effectively teach current employees how to use AI. Because of these training programs, current employees could adjust to the rapid development of AI and keep their current jobs. These programs would also create a wide variety of new internship opportunities for students worldwide, allowing younger generations to be exposed to employment opportunities from an earlier age and further develop their professional skills.  

Furthermore, these training programs can go beyond just private sectors. With the rapid development of AI and the resulting risk of job displacement, current students must understand how to use AI for their desired career. According to Wendy Jones and Jennette Vanderpool, who both work in Education Strategy for an IT consultancy firm, schools across the nation could teach K-12 students how to use AI so that they can apply these skills in the workforce (Jones and Vanderpool). By taking these classes, students can learn these skills early on before entering the workforce. Not only will this allow them to be more prepared for the future effects, this will also decrease the rate of job displacement, because these students can get ahead of the problem before being replaced. This will positively impact the mental health of students and parents. By taking courses that will teach them how to use AI effectively and properly, students and parents will no longer have to live in fear for the future of their placement of employment being affected or taken over by Artificial Intelligence. 

By developing training programs to inform people how to use AI and establishing social programs, the private sector and the government can properly address the mental effects and the increasing rate of unemployment as a result of job displacement. This research suggests ways in which the private sector and the government can improve this issue. It explores the effects that job displacement has on mental health that goes beyond financial stability. While this research does explore how the private sector and the government can improve this issue, the research does not cover how all the different job fields are affected. It gives a general overview of how artificial intelligence causes job displacement across the board. To further develop this research, I can dive deeper into how each field is affected specifically. 

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