The Future of Work in the Artificial Intelligence Era

Recent discussions about the implications of artificial intelligence (AI) for employment have veered between the poles of apocalypse and utopia. Under the apocalyptic scenario, AI will displace a large share of all jobs, vastly exacerbating inequality as a small capital-owning class acquires productive surpluses previously shared with human labourers.

The utopian scenario, curiously, is the same, except that the very rich will be forced to share their winnings with everyone else through a universal basic income or similar transfer program. Everyone will enjoy plenty and freedom, finally achieving Marx’s vision of communism, where it is “possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman, or critic.”

The common assumption in both scenarios is that AI will vastly increase productivity, forcing even highly paid doctors, software programmers, and airline pilots to go on the dole alongside truck drivers and cashiers. AI will not only code better than an experienced programmer; it will also be better at performing any other tasks that the coder might be retrained to do. But if all this is true, AI will generate unheard-of wealth that even the most extraordinary sybarite would have trouble exhausting.

The dystopic and utopian outcomes reduce AI to a political problem: whether the left-behind (who will have the advantage of numbers) can compel the AI tycoons to share their wealth. There is a reason for optimism. First, the gains from AI under this scenario are so extravagant that the super-rich might not mind giving up a few marginal dollars, whether to appease their consciences or to buy social peace. Second, the growing mass of the left-behind will include highly educated, politically engaged people who will join the traditionally left-behind in agitating for redistribution.

But there is also a deeper question.

How will people respond, psychologically and politically, to the realisation that they can no longer contribute to society by engaging in paid work?

Labour-force participation has already declined significantly for men since the 1940s. Though women entered the workforce in large numbers only in the 1970s and 1980s, their participation rate also began to decline. This may well reflect a trend of people at the bottom losing the capacity to convert their labour into compensable value as technology advances. AI could accelerate this trend, defenestrating people at the middle and top as well.

If the social surplus is shared widely, one might ask, “Who cares?”

In the past, upper-class members avoided taking jobs and disdained those who did. They filled their time with hunting, literary pursuits, parties, political activities, hobbies, and so on – and they seem to have been rather pleased with their situation (at least if the bored gentry idling in summer dachas in Chekhov’s stories are to be ignored).

Modern economists tend to think of work in the same ways, as simply a cost (“c”) that must be offset by a higher wage (“w”) to induce people to work. Like Adam and Eve, they implicitly consider work to be pure bad. Social welfare is maximised through consumption, not through the acquisition of “good jobs.” If this is right, we can compensate people who lose their jobs by giving them money.

Maybe human psychology is flexible enough that a world of plenty and little or no work could be regarded as a boon rather than an apocalypse. If aristocrats of the past, retirees of today, and children of all eras can fill their time with play, hobbies, and parties, perhaps the rest of us can, too.

But, research indicates that the psychological harms of unemployment are significant. Even after controlling for income, unemployment is associated with depression, alcoholism, anxiety, social withdrawal, disruption of family relations, worse outcomes for children, and even early mortality. The recent literature on “death of despair” provides evidence that unemployment is associated with elevated suicide and overdose risk. The mass unemployment linked to the “China shock” in some regions of the United States was associated with elevated mental health risks among those affected.

Loss of self-esteem and a sense of meaning and usefulness is inevitable in a society that valorises work and scorns the unemployed and unemployable.

As such, the long-term challenge posed by AI may be less about redistributing wealth and more about preserving jobs in a world in which human labour is no longer valued. One proposal is to tax AI more relative to labour, whereas another – recently advanced by MIT economist David Autor – is to use government resources to shape the development of AI so that it complements rather than substitutes for human labour.

Neither idea is promising. If the most optimistic predictions about AI’s future productivity benefits are accurate, a tax would have to be tremendously high to have any impact. AI applications are likely to be complements and substitutes. After all, technological innovations generally enhance some workers’ productivity, while eliminating others’ tasks. If the government steps in to subsidise complementary AI – say, algorithms that improve writing or coding – it could just as easily end up displacing jobs as preserving them.

Even if taxes or subsidies can keep alive jobs that produce less value than AI substitutes, they will merely be putting off the day of reckoning. People who derive self-esteem from their jobs do so partly because they believe society values their work. Once it becomes clear that their work can be done better and more cheaply by a machine, they will no longer be able to maintain the illusion that their work matters. If the US government had preserved the jobs of buggy-whip makers when automobiles displaced horse-drawn carriages, one doubts that those positions would still confer much self-esteem on anyone who took them today.

Even if humans can adjust to a life of leisure in the long term, the most optimistic projections of AI productivity portend massive short-run disruptions to labour markets, akin to the impact of the China shock. That means substantial – and for many people, permanent – unemployment. There is no social safety net generous enough to protect people from the mental-health effects, and society from the political turmoil, that would follow from such widespread disappointment and alienation.

Silencing Inner Critic: One Size Does Not Fit All

A couple who had refrained from social interactions paid a visit to my house last week. Observing them interact with my daughter was truly heartening. They bonded effortlessly with her, eliciting joyful laughter and playful interactions. My baby seemed drawn to them, displaying comfort in their presence.

It was surprising. They were a reserved duo who did not mingle with people due to apprehension about facing judgmental individuals. I was taken aback when the woman confided in me about their lives. They were married at a young age, and have persevered for over a decade. Their lives have been marked by successful careers and a comfortable lifestyle. However, a tragic accident left them with extensive physical injuries and thwarted their ability to have children.

When confronted with inquiries, they respond with grace, recognising that some matters are beyond their control. In return, they endured years of unwarranted blame and judgment. Some went as far as suggesting that their marriage lacked value without children, urging the husband to abandon his wife in pursuit of parenthood with another woman. She was unjustly labelled as a selfish person who prioritised career over motherhood.

She expressed gratitude for my family’s discretion over their lives in the two years of our acquaintance. It was rare for her to encounter such understanding and respect, which encouraged her to open up.

There are those individuals who are excessively opinionated, imposing their views on others without consideration. Their unkind words inflict hurt and disappointment, lacking any insight into the struggles and experiences of those they criticise. It seems many fail to take responsibility for their words and actions, freely expressing whatever comes to mind without considering the impact.

Judgment is inevitable. However, it becomes agonising for some, hindering their ability to socialise and find peace.

Too often, individuals criticise and judge others simply because they do not conform to societal expectations. We discussed how these destructive behaviours pervade our society, detrimentally impacting countless individuals’ mental well-being, social lives, and emotions. It is as if people forget that individuals have the freedom to make their own decisions, instead choosing to meddle and inflict hurt.

Critiques are endless regardless of the action. Whether someone gains or loses weight, has children, or remains single, there is that unsolicited advice lurking in the background. It can be frustrating, particularly when it comes from family members or peers.

Some individuals feel compelled to comment on others’ lives, without proper understanding. The prospect of someone facing difficulties triggers a desire to criticise and dictate what they should do. It may be attributed to the validation of our deep-seated desire to solve problems. While it makes life interesting, it also puts pressure on those who opt to defy the norm.

In a world where social media amplifies voices and facilitates instant communication, it is easier for individuals to insert themselves into the lives of others without considering the consequences. The digital age has blurred the lines between personal and public spaces, making it difficult for individuals to maintain boundaries.

We should afford others the grace to live free from unwarranted judgment and interference. While offering help to others is a natural inclination and a sign of empathy within us, it is essential to respect people’s boundaries and draw lines.

Modern Kids Call for Matching Parents

A recent television program focusing on children’s interactions with adults sparked a dialogue about parenting techniques. As a parent myself, my goal is to nurture confidence and independence in my children, empowering them to think critically rather than simply conforming to societal norms.

Unlike previous generations, where children were encouraged to remain silent and submissive in the presence of elders, I believe in outspokenness and self-assurance. However, the line between confidence and arrogance is delicate. While it is essential for children to develop self-esteem, it should never excuse disrespectful behaviour without valid justification.

Children naturally tend to have a self-centred perspective, prioritising their desires and needs. It is through careful guidance in their upbringing, that they learn empathy, respect, and accountability for others. Unfortunately, certain parenting methods may inadvertently instil entitlement rather than respect.

Constantly indulging every whim and desire can create a sense of entitlement in children, leading them to believe that the world owes them something. This expectation can breed frustration when they encounter limitations beyond their immediate circle. Parents and caregivers need to strike a balance between nurturing self-esteem and instilling respect, while also encouraging meaningful interactions with others.

The modern emphasis on individualism in child-rearing has widened the generational gap, exacerbated by the pervasive influence of technology. Children immersed in the digital world lack essential social cues and communication skills for respectful interactions. This shift from face-to-face conversations to online diminishes opportunities for children to develop empathy and respect through real-world experiences.

Disregarding elders and authority figures can escalate conflicts and erode trust within communities, ultimately affecting social cohesion. To address this issue, a comprehensive effort involving parents and educators is essential. Parents play a critical role in shaping behaviour and attitudes, providing structure and clear expectations for their children while enforcing consequences for disrespectful behaviour.

Educators also have a major role in promoting respectful interactions among children, incorporating social and emotional learning programs into the school curriculum to develop essential skills such as communication and empathy. Encouraging collaborative projects can breed a sense of community among students.

Positive portrayals of intergenerational interactions in media and entertainment can influence attitudes, while community initiatives such as mentorship programs can facilitate connections between different age groups, promoting mutual understanding and respect across generations.

While it is important to nurture confidence in children, it is equally vital to instil respect for others. By striking a balance between self-esteem and respect, and promoting meaningful interactions across generations, we can raise children who are confident, empathetic, and respectful individuals. They may not fully comprehend the consequences of their actions or words, especially in their formative years.

As parents, we must guide them to express themselves confidently while also respecting the perspectives and experiences of others. We are responsible for teaching them to consider the impact of their words and actions on those around them. It is important to lead by example and model respectful behaviour. They learn through observation, and treating others with kindness and respect sets a powerful precedent.

4,400,000

The number of borrowers registered in the credit reference system database under the National Bank of Ethiopia (NBE). This number saw a wobbling jump of 1,992pc in 2023 after microfinance institutions were incorporated into the database.

 

“Stable and predictable access to maritime resources [for Ethiopia].”

Korir Sing’oei, Kenya’s principal secretary for foreign affairs, told Reuters last week that his country has proposed a treaty for regional maritime access for landlocked countries, hoping to defuse tension between Ethiopia and Somalia. According to him, IGAD and Djibouti are on board with this proposal.

TIERED TROLLEYS

An eerie optical illusion appears as the city bus passes under a crossing bridge below a row of cross-country jitneys. Multi-tiered transportation infrastructure is rare in the capital as most roads are characterised by narrow passages snaking by the city’s buildings. The City Administration has revealed plans to expand pedestrian walkways and bicycle lanes and even introduce cable cars to improve the transportation infrastructure. Electric-powered buses, motorcycles and automobiles are poised to become the defining feature of the city as officals issue a series of disincentives for internal combustion options.

LIBERAL LEAN

An infrastructure pole around Bole is being moved on a busy afternoon. The first telephone infrastructure was extended from Harar to the capital city in 1894, during the reign of Emperor Menelik II. The state-owned Ethiopian Telecom has made significant headway since its reestablishment six years ago by cutting tariffs, expanding coverage, and entering new business avenues. The 130-year-old enterprise will avail a 10pc ownership stake as Ethiopia launches its inaugural stock exchange next year. It had revenues of 42.9 billion Br in the first half of the current year. The telecom operator which had a monopoly on telecom services for all but the last two years is the first of at least four SOEs poised to open themselves up to private ownership.

COSMETIC CRESCENDO

A city at the cusp of an aesthetic reformation is laid bare from the top floor of a high-rise in the capital. The contours of an old city trace the edges of an emerging metropolis as Addis Abeba sheds its wrinkles for a sleek cosmopolitan look. The ninety-day project gushing across the city entails mass resettlement and billions in compensation. Just two weeks into the demolition around Piassa, the City Administration has revealed plans to lease of land to prospective developers who can meet the new standards. A delicate balance exists between development projects and resettlement, with experiences in other African countries illustrating that poor planning could leave the displaced worse off.

ZamZam Bank Joins Commodity Exchange Payment System

The pioneering full-fledged interest-free commercial bank, ZamZam Bank, has become the 24th financial institution to join the Ethiopian Commodity Exchange’s (ECX) payment system.

CEO of the Exchange Wendemagegnehu Negera signed the deal with the President of the Bank Melika Bedri last week. According to the CEO, joining the platform which has around 11,000 accounts registered and has transacted over 386 billion Br so far, will allow a reliable mechanism whereby traders can be certain that payments will be made through a reliable system facilitated by the Exchange.

As the volume of sesame at 73,000tns and coffee at 50,000tns traded through the Exchange increased by 45pc and 17pc, respectively this year, transactions have passed the 19.4 billion Br mark in nine months. A total of 172,000tns of commodities were transacted during this period.

The Exchange has recently announced that its trading operations would become digital, currently finalising the development of software. An additional 21 commodities including salt and barley will also be added to the floor.

AfDB, ADF to Chart Transformation Path at Diamond Jubilee

The African Development Bank (AfDB) and the African Development Fund (ADF) are gearing up for a major joint meeting in Nairobi, Kenya, expected to draw around 4,000 participants. The event, taking place at the Kenyatta International Conference Centre in late May, will focus on “Africa’s Transformation,” a theme reflecting the continent’s ongoing pursuit of economic and social development.

“Despite progress over the years, Africa’s transformation remains incomplete,” said Vincent O. Nmehielle (Prof), secretary-general of the AfDB Group.

This joint meeting promises to be a platform for critical discussions on Africa’s development journey and the AfDB’s role in supporting it. With a large gathering of governors, development partners, and private sector representatives, the event is expected to generate valuable insights and collaborations for Africa’s future.

The meeting will delve into this issue, according to Vincent, with the board of governors reviewing the annual report and discussing a 10-year strategy to accelerate growth and attract greater private sector involvement. Knowledge-sharing events are also planned to explore strategies for achieving structural transformation across the continent.

The gathering holds special significance as it coincides with the AfDB’s 60th anniversary. Activities celebrating the Bank’s six decades of impact across Africa will be held throughout the year, culminating in September.

Big Art Sale Returns to Addis

The annual Big Art Sale returns to Addis Abeba this weekend. Over 100 artists are expected to showcase their original works and prints at the Hilton Addis. What’s Out Addis in partnership with the Hilton Hotel is behind the event that showcases the works of over 100 artists.

Big Art Sale has been around for the past 18 years showcasing paints and prints. According to organisers, it offers a chance to meet the artists and enjoy a variety of art forms with a dedicated Kids’ Corner and food and drink vendors.

Securities Exchange Soars Above Capital Raise Target

The Ethiopian Securities Exchange (ESX) has achieved a remarkable feat, surpassing its initial capital requirement by more than twofold. Raising a total of 1.51 billion Br capital, the Exchange paves the way for establishing Ethiopia’s first stock exchange.

According to Tilahun Kassahun, CEO of the Exchange, the substantial capital raise signals strong investor confidence, with participation from both domestic and international markets. Local investors include 16 private commercial banks, 12 insurance companies, and 17 institutional investors. State-owned enterprises under the Ethiopian Investment Holdings have also chipped in with 275 million Br, along with FSD Africa.

Transparency is a priority for the ESX, according to Tilahun, confirming that the final list of investors will be made public once finalised. The involvement of foreign investors is particularly noteworthy for him, with the Trade & Development Bank Group and the Nigerian Exchange Group joining the venture.

The ESX has opened a draft Exchange Rulebook for public consultation, outlining the criteria for membership, trading procedures, transaction requirements, and settlement processes.

“Public input will be instrumental in shaping the operational structure,” said Tsegaamlak Solomon, general counsel.