Published Thursday, May 18, 2023 at: 5:03 AM EDT
A quarter of the tasks performed in 2023 by American workers are expected to be automated by Artificial Intelligence (AI) by 2030 and U.S. labor productivity is expected to surge. The U.S. labor force is about to be reshaped. Here are three implications of AI on personal financial plans.
Manias And Bubbles. From tulips to cryptocurrency, financial history is replete with manias and bubbles sparked by the next big thing. AI investments could become wildly overpriced, just like what happened in the dot-com stock crash of 2000. AI is different from cryptocurrency mania. Cryptocurrency held no intrinsic value. AI is not the same. It is a watershed advancement in expanding knowledge, and it’s led by America. But don’t bet your retirement on it. Valuations of AI investments already have been bid up and a wave of speculative investments is likely to materialize for the next few years.
Complications. AI comes with known complications that pose investment risk, and federal government regulation of AI is likely.
Job Security. AI over the next few years will replace low-skilled clerical jobs before moving upstream to more complex jobs where you must perform more complicated tasks requiring judgment and experience. Unlike layoffs experienced during previous recessionary cycles, the jobs of white-collar workers laid off in the next few years are likely never to return. Those laid off workers will need to look for jobs with a different mix of skills. AI is expected to open new jobs but the nature of work to be done by people in those positions will change. The financial risk posed by shifts in the job market are greatest to workers near retirement age.
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