Earlier this week, I wrote an article which was published in The Economic Times on what I think about AI and how I am using it. The discussion of AI throws up the challenge of job losses. Here is a new study on this subject, which assuages many doubts.
In a new research paper, economists looked at the job market across a number of European countries between 2011 and 2019. That’s the period during which the AI technique deep learning emerged as a powerful way to automate tasks like transcribing speech, analyzing images, and making algorithmic recommendations for social feeds and e-commerce sites.
The headline result was that industries where AI could be the most useful did not see a reduction of jobs. In fact, for more highly skilled jobs vulnerable to AI, such as white-collar office work that involves working with data, there was around a 5 percent increase in the number of employed workers. The researchers say this supports the idea that new technology can increase demand for more skilled workers at the same time that it replaces those who do routine work. Less skilled workers didn’t seem to be significantly affected by software or AI.
In another part of the world, Canadians are now being forced to work beyond their retirement.
More than half of Canadians still in the workforce past the age of 60 are there by necessity, not choice, according to a Labour Force Survey from Statistics Canada in 2022. It cited essential expenses and pension ineligibility as the primary reasons people continued working.
And a report from February found fewer people had retired in the past year, compared to the year before, among people aged 55 to 64.
This is not unfamiliar territory and I am afraid of our generation in India. The social security of earlier joint families has more or less disappeared and for those who do not have pensioned jobs, retirement could become financially challenging, given that longevity has now increased significantly. Below is a table of life expectancy in India at birth. Urban middle class and above are expected to live beyond the age of 70 and probably closer to 75.
The only way is to save and invest, preferably in equities to create a nest egg for your retirement. Start investing today, if you haven’t already done so.
Thought of the Week
I greatly admire Warren Buffett. He is one of the great investors of all time. But I strongly disagree that the shares of most wonderful businesses can be held forever because most wonderful businesses become less wonderful over time—and many eventually run into difficulties.
~ Edgar Wachenheim,
from the book “Common Stocks and Common Sense: The Strategies, Analyses, Decisions, and Emotions of a Particularly Successful Value Investor”
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