Temporary unemployment from labor-saving technologies raises the US jobless rate by 0.3 percentage points for every 1% increase in productivity, but this effect typically dissipates within two years, according to Briggs and Dong. Generative AI is projected to boost labor productivity in the US by around 15%, potentially causing a temporary half-percentage-point rise in unemployment during its transition phase. AI adoption could lead to a job displacement estimate of 6-7%, ranging from 3% to 14% depending on various factors. While AI may create frictional unemployment as displaced workers search for new roles, historical trends indicate that technological disruptions are short-lived and often lead to new job opportunities. Although some companies report reduced hiring due to AI efficiency gains, overall adoption remains low, especially among smaller firms. Industries like marketing, design, and administration are seeing reduced labor demand due to AI advancements. These insights underscore the balance between automation and job creation.
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