Fed's "AI Anxiety": 80% of Companies Say AI Has No Use — Then Why Lay Off Staff?
Fed warns AI may impact employment, but survey shows 80% of companies say AI has no impact on productivity. Economist: This is "Cortes Moment" — burning boats, no turning back.
Washington — The Fed is somewhat "anxious" recently.
March 2, the Fed released a report warning AI may have "far-reaching impacts" on employment and inflation. But interestingly, the same survey shows: 80% of companies say AI had no impact on productivity in the past three years.
This is awkward.
Fed's Warning
The Fed said in the report:
AI may replace some jobs
But may also create new jobs
Overall impact "uncertain"
AI may replace some jobs
But may also create new jobs
Overall impact "uncertain"
"We're closely monitoring AI's impact on labor market," Fed Chair said at press conference. "But it's too early to conclude."
Companies' "Contradiction"
But company data is contradictory.
On one hand, layoffs are happening. Stripe, Square and other tech companies recently laid off staff, citing AI improved efficiency.
On the other hand, 80% of companies say AI "has no use."
"This isn't contradictory," an economist explained. "Companies lay off because they want to — AI is just an excuse."
"Cortes Moment"
An economist used "Cortes Moment" to describe the current situation.
Cortes was a Spanish conquistador, legend says before invading Mexico he burned all his ships — no way back, only forward.
"Companies are in this situation now," economist Mark Zandi said. "They burned the 'traditional jobs' boat, can only embrace AI."
In other words: regardless of whether AI is useful, companies must "pretend" to use AI, otherwise they're behind.
What's the Truth?
So does AI actually work?
"Short term, AI indeed hasn't significantly improved productivity," a researcher admitted. "But long term, it will."
Reason is simple: AI is still in early stages. Like the internet in 1990s, people also said "useless" then, later changed the world.
Whose Job is at Risk?
Which jobs will AI affect?
"Blue-collar jobs already affected some," Fed report said. "But white-collar jobs — like programming, data analysis — may be more suitable for AI."
This means: before AI affected blue-collar, now white-collar also started worrying.
Policy Dilemma
This is a challenge for policymakers.
"We can't let it go just because AI 'might' be useful," a policy expert said. "Can't restrict it because it 'hasn't' been useful yet."
Best strategy? "Stay neutral, observe, wait."
Epilogue
At an economic forum, I met a laid-off programmer. Replaced by AI.
"Company said AI can do my job," he said. "But I doubt — can AI really do it?"
Perhaps this is the era's contradiction: companies say AI is useful (to lay off), employees say AI isn't (to keep jobs).
Where is the truth? Only time knows.