Why your job may face a double threat if the economy sours
Hardly a day passes without word that a major company is increasing its use of artificial intelligence, or a warning that AI will have dramatic impacts - one day - on the U.S. workforce.
Now, some economists warn that a projected slowdown in the U.S. economy could accelerate the trend.
Subscribe to The Post Most newsletter for the most important and interesting stories from The Washington Post.
With new reports suggesting that the U.S. economy will probably slow this year, economists and AI experts say more businesses may speed up AI use to cut costs, generate revenue and boost worker productivity. That could lead to more-rapid adoption but also downsides, including job losses and consumer harms.
'Economic downturns spur you to do more,' said Eric So, professor of global economics and management at the Massachusetts Institute of Technology. 'There's a lot of focus on what we can do and not enough questions like 'Should we do that?' and 'Is it being done in a safe way?''
The Organization for Economic Cooperation and Development estimated on Tuesday that economic growth in the United States will slow to 1.6 percent this year from 2.8 percent, while inflation is set to rise to 3.9 percent by the end of this year. Although trade tensions have cooled somewhat since President Donald Trump announced big tariffs in April, economists worry that higher trade barriers and uncertainty will continue to eat into growth, with some predictions of recession in the coming year.
While a slowdown could encourage more use of AI, there's also evidence that some companies will pull back on heavy technological investments.
A wide range of companies are increasingly turning to AI regardless of the economic environment. Wall Street firms including JPMorgan Chase and Morgan Stanley are using AI to help boost sales and update legacy code. E-commerce company Shopify and cloud storage start-up Box are requiring workers to use AI regularly in their work to boost productivity and results. Social media firm Meta plans to automate risk assessment as it relates to the privacy reviews of its products. IBM, which recently announced job cuts, replaced a couple hundred human resource workers with 'AI agents' to do repetitive tasks such as onboarding and scheduling interviews. It said that over the past four years, AI saved the company 40 percent in its HR budget.
Dario Amodei, CEO of billion-dollar AI start-up Anthropic, received attention last week for suggesting that half of all white-collar entry-level jobs may be eliminated by AI within five years.
Most people 'are unaware that this is about to happen,' Amodei told Axios. 'It sounds crazy, and people just don't believe it.'
College graduates may already be losing jobs to AI, according to a report last month from the global economic advisory firm Oxford Economics. The unemployment rate for recent college graduates has risen 1.6 percentage points since mid-2023, nearly triple the increase of the national unemployment rate.
'There are signs that entry-level positions are being displaced by artificial intelligence at higher rates,' Matthew Martin, Oxford Economics senior economist, wrote in the report, while noting that some of the change may be normal.
Since the debut of OpenAI's ChatGPT in late 2022, companies have been relatively slow in their adoption of generative AI. About 8.7 percent of U.S. companies used AI to produce their products and services in the two weeks between April 21 and May 4, up from 4.8 percent a year earlier, according to the Business Trends and Outlook Survey conducted by the U.S. Census Bureau. ChatGPT, meanwhile, has more than 400 million weekly active users. (OpenAI has a content partnership with The Washington Post.)
AI's broader use could save companies money but also more quickly expose some of the downsides of the services, especially when they struggle with accuracy or have biases, experts say. That could be especially problematic in fields like medicine, finance and law, said Columbia Business School professor Laura Veldkamp.
'When we have tech shifts, you will get things right and wrong,' said Veldkamp, whose research explores how companies' use of AI affects the macroeconomy. 'As the tech grows up, it goes through a painful stage. We have to get through that to hone the benefits from it.'
Another impact will probably be job displacement, experts say. So far, companies have mostly touted AI as a tool to aid human workers. But as the tech gets better and budgets get tighter in a slowing economy, companies may be more willing to outsource work to AI, slowing hiring or even cutting jobs, experts say. Klarna, a Swedish fintech company, said AI helped it lower vendor expenses, increase internal productivity and better manage operations with fewer employees (the company reduced head count by 38 percent from 2022 to 2024), according to filings made with the Securities and Exchange Commission in March. It has since suggested it went too far in cuts and is hiring more people.
'The hope is that AI will be utilized to improve work and productivity and create new work,' said Mark Muro, a Brookings Institution fellow who has studied AI and its impacts. 'But there's no guarantee.'
Historically, automation has been one solution for labor cost-savings during difficult economic conditions, Muro said. In some cases, investments in automation allow companies to cut costs through head count reduction. When consumer demand falls, companies can take time to make a big technological switch that would have been too disruptive in the regular course of business, Veldkamp said.
An AI revolution has the potential to impact a wide range of industries - from customer service to health care to financial services and beyond - because the technology is able to do tasks such as data-crunching, research and writing that are part of white-collar work. And it comes at a lower cost than some previous technological revolutions like automating a manufacturing facility with machines, Veldkamp said.
Microsoft recently found that some companies are considering using AI to reduce head count in the next year or so, according to a study it conducted. But more of them aim to maintain head count and retrain their workforce.
'You have a class of companies going all in and reinventing themselves with AI,' said Colette Stallbaumer, co-founder of Microsoft WorkLab and general manager of Microsoft 365 Copilot. 'But you've also got a lot of companies and enterprises still figuring it out. It'll still take time, and every company is going to be different.'
Economic strain may lead some companies to delay AI investments, deeming the risks to be higher than the rewards, said Brett House, an economics professor at Columbia Business School.
'If there's uncertainty, it's not clear there's a market, or you can't determine the prices of your goods, it puts a huge chill on investing in any tech,' he said. 'Companies that are cash-constrained, have thin margins or a smaller labor component may just pull back on investment to preserve their current business model.'
Recent earnings reports from two Big Tech companies suggest that a slowdown in the economy is spurring them to rethink their aggressive spending. Microsoft, which has been pouring money into AI, reported that it's spending $1 billion less in capital expenditures from the previous quarter, though that still amounts to $21.4 billion. The company also recently said it is 'slowing or pausing' some early-stage data center projects, which are needed to power AI. Amazon Web Services is reportedly pausing some of its data center leasing discussions, particularly international ones, according to a recent note from Wells Fargo analysts citing economic uncertainty. (Amazon founder Jeff Bezos owns The Washington Post.)
Big technological shifts like AI take time, many economists say. AI might move faster given how quickly companies can roll it out, but the shift won't be overnight, Veldkamp said.
As the technology develops, new jobs will probably also emerge, even ones that aren't yet imaginable, say experts. Five years ago, few would have heard of prompt engineers - those who specialize in crafting effective prompts for AI bots. But there will be a period in which some roles either disappear or decrease in quantity before new jobs are created. Government data may already indicate that computer programmers are feeling the squeeze, Muro said.
'This is all new. We haven't gone through a down economy with a technology at this early stage, so it'll be interesting to see how this plays out,' he said.
Related Content
Donald Trump and the art of the Oval Office confrontation
Some advice from LGBTQ elders as WorldPride kicks off amid fears
Black Democrats fume over 2024 while 'searching for a leader' in 2028
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
8 minutes ago
- Yahoo
Bombing Iran's Nuclear Sites Complicates Hunt for What's Left
(Bloomberg) -- President Donald Trump's decision to order US forces to attack three key Iranian nuclear installations may have sabotaged the Islamic Republic's known atomic capabilities, but it's also created a monumental new challenge to work out what's left and where. Bezos Wedding Draws Protests, Soul-Searching Over Tourism in Venice One Architect's Quest to Save Mumbai's Heritage From Disappearing JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports Trump said heavily fortified sites were 'totally obliterated' late Saturday, but independent analysis has yet to verify that claim. Rather than yielding a quick win, the strikes have complicated the task of tracking uranium and ensuring Iran doesn't build a weapon, according to three people who follow the country's nuclear program. International Atomic Energy Agency monitors remain in Iran and were inspecting more than one site a day before Israel started the bombing campaign on June 13. They are still trying to assess the extent of damage, and while military action might be able to destroy Iran's declared facilities, it also provides an incentive for Iran to take its program underground. Indeed, there's just a slim possibility that the US entering the war will convince Iran to increase IAEA cooperation, said Darya Dolzikova, a senior research fellow at the Royal United Services Institute, a London-based think tank. 'The more likely scenario is that they convince Iran that cooperation and transparency don't work and that building deeper facilities and ones not declared openly is more sensible to avoid similar targeting in future,' she said. IAEA inspectors haven't been able to verify the location of the Persian Gulf country's stockpile of near-bomb-grade uranium for more than a week. Iranian officials acknowledged breaking IAEA seals and moving it to an undisclosed location. The IAEA called on a cessation of hostilities in order to address the situation. Its 35-nation board will convene on Monday in Vienna, Director General Rafael Mariano Grossi said. Trump dispatched B-2 stealth jets laden with Massive Ordnance Penetrators, known as GBU-57 bombs, to attempt to destroy Iran's underground uranium-enrichment sites in Natanz and Fordow. Satellite images taken on Sunday of Fordow and distributed by Maxar Technologies show new craters, possible collapsed tunnel entrances and holes on top of a mountain ridge. No evidence of damage to the underground enrichment halls can be seen, and IAEA inspectors reported there were no radiation releases from the site. US Air Force General Dan Caine told a news conference on Sunday that an assessment of 'final battle damage will take some time.' Before the US intervention, images showed Israeli forces alone had met with limited success four days after the bombing began. Damage to the central facility in Natanz, located 300 kilometers (186 miles) south of Tehran, was primarily limited to electricity switch yards and transformers. The US also joined in attacking the Isfahan Nuclear Technology and Research Center, located 450 kilometers south of Tehran. That was after the IAEA re-assessed the level of damage Israel had dealt to facility. Based on satellite images and communications with Iranian counterparts Isfahan appeared 'extensively damaged,' the agency wrote late on Saturday. The IAEA's central mission is to account for gram-levels of uranium around the world and to ensure it isn't used for nuclear weapons. The latest bombing now complicates tracking Iranian uranium even further, said Tariq Rauf, the former head of the IAEA's nuclear-verification policy. 'It will now be very difficult for the IAEA to establish a material balance for the nearly 9,000 kilograms of enriched uranium, especially the nearly 410 kilograms of 60% enriched uranium,' he said. Last week, inspectors had already acknowledged they'd lost track of the location of Iran's highly enriched uranium stockpile because Israel's ongoing military assaults are preventing its inspectors from doing their work. That uranium inventory — enough to make 10 nuclear warheads at a clandestine location — was seen at Isfahan by IAEA inspectors. But the material, which could fit in as few as 16 small containers, may have already been spirited off site. 'Questions remain as to where Iran may be storing its already enriched stocks,' Dozikova said. 'These will have almost certainly been moved to hardened and undisclosed locations, out of the way of potential Israeli or US strikes.' Far from being just static points on a map, Iran's ambitions to make the fuel needed for nuclear power plants and weapons are embedded in a heavily fortified infrastructure nationwide. Thousands of scientists and engineers work at dozens of sites. Even as military analysts await new satellite images before determining the success of Trump's mission, nuclear safeguards analysts have reached the conclusion that their work is about to become significantly harder. By bombing Iran's sites, Israel and the US haven't just disrupted the IAEA's accountancy of Iran's nuclear stockpile, they've also degraded the tools that monitors will be able to use, said Robert Kelley, who led inspections of Iraq and Libya as an IAEA director. That includes the forensic method used to detect the potential diversion of uranium. 'Now that sites have been bombed and all classes of materials have been scattered everywhere the IAEA will never again be able to use environmental sampling,' he said. 'Particles of every isotopic description have infinite half-lives for forensic purposes and it will be impossible to sort out their origin.' Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros The US Has More Copper Than China But No Way to Refine All of It Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
21 minutes ago
- Miami Herald
Donald Trump's SNAP Benefit Cut Plans Suffer Blow
A plan by Republicans to shift a portion of federal food stamp costs to state governments suffered a major setback after the Senate parliamentarian found it would violate chamber rules. The blocked provision was an attempt to reduce federal spending on the Supplemental Nutrition Assistance Program (SNAP), affecting more than 40 million low-income Americans who rely on food aid. The shift would have transferred major SNAP costs to the states, requiring them to pay at least 5 percent—and potentially more—of benefit costs, which analysts warned could result in significant cuts to nutrition support. The parliamentarian's decision places additional pressure on the bill's champions to find alternative means to fund tax cuts without imperiling food assistance, Medicaid, or other federal support programs. The provision, a cornerstone of Republican efforts to offset the costs of President Donald Trump's multitrillion-dollar tax and spending legislation, has been ruled inadmissible under Senate rules, sending GOP leaders scrambling to revise the mega bill. The ruling, issued by Senate parliamentarian Elizabeth MacDonough, came as the package prepared for a vote. While her opinions are advisory, they are rarely ignored in lawmaking practice. Republican lawmakers are now searching for new savings as they continue to advance Trump's legislative priorities despite the setback. MacDonough declared the SNAP cost-sharing plan noncompliant with the chamber's budget reconciliation rules, specifically the Byrd Rule, which bars certain policy measures from being attached to budget bills. The proposal would have shifted billions of dollars in SNAP costs from the federal government to the states, creating a new fiscal obligation for state governments and threatening coverage for millions. House Passes Bill with GOP SNAP Cuts The House passed the broader tax and spending package along party lines in May 2025, including a provision to require states to fund at least 5 percent of SNAP benefits and more for high error rates. The House-passed measure's SNAP provision was projected to save about $128 billion. Republican leaders had hoped these savings would help offset the bill's $4.5 trillion in tax cuts and new spending. Other Key Provisions Beyond SNAP, the package includes an extension and expansion of individual and business tax cuts, new work requirements for Medicaid recipients, cuts to federal health and nutrition programs, increased military and border security funding, and the elimination of taxes on tips for service workers. GOP Paths Forward Republican leaders, including Senate Agriculture Committee Chair John Boozman of Arkansas, said they were exploring options to keep the legislation on track while still delivering savings elsewhere. Options range from modifying the disputed SNAP provision to removing it entirely or risking a procedural vote requiring 60 votes—an unlikely scenario in the current Senate. Impact on SNAP Recipients The plan would have expanded work requirements to older adults (up to age 65), a component that remains in the bill for now. Democrats and anti-hunger advocates warned of significant harm to those in need, with more than 3 million individuals projected to lose food stamp access based on Congressional Budget Office estimates. Additional Rulings Expected The Senate parliamentarian is also expected to rule on other elements in the bill, including limits on immigrant eligibility for nutrition aid and changes to federal agencies, with further decisions likely to shape the final legislation. Minnesota Senator Amy Klobuchar, the top Democrat on the Senate Agriculture, Nutrition and Forestry Committee, said: "We will keep fighting to protect families in need," opposing shifts in SNAP costs to states, which she said would result in significant benefit cuts. Arkansas Senator John Boozman, chair of the Senate Agriculture Committee, said Republicans are "exploring options" to comply with Senate rules, while supporting those reliant on SNAP. Senate Republicans are expected to revise the bill to comply with the parliamentarian's rulings or drop the contested SNAP provisions. Further decisions from the adviser on other elements of the megabill are anticipated before any final Senate vote. This article contains reporting from The Associated Press. Related Articles When Are July 2025 SNAP Payments Coming?Republicans Out Of Step With Voters On Medicaid FundingNew York State Facing Lawsuit Over SNAP BenefitsSNAP Recipients Get Extra Money This Month in California 2025 NEWSWEEK DIGITAL LLC.
Yahoo
38 minutes ago
- Yahoo
British Airways flights to Doha and Dubai cancelled after US strikes Iran
British Airways has cancelled flights to Dubai and Doha after Donald Trump ordered a US attack on Iran's nuclear sites. It comes after a British Airways (BA) flight from London Heathrow to Dubai was diverted to Zurich on Saturday night (June 21). The BA109 flight departed from the UK at 9.53pm on Saturday and reached Saudi Arabia before the Boeing 787 Dreamliner changed its course, landing in Switzerland, according to flight-tracking website Flightradar24. All of the airline's flights to Dubai and Doha that were scheduled to depart from Heathrow on Sunday have been cancelled, including return flights, the company said. Dubai: 1,000-plus British Airways passengers waiting in the UAE to be flown home after BA cancelled 4 flights from Heathrow to DXB. 1 BA plane on Saturday reached Saudi Arabia before turning around, but had to divert to Zurich. Emirates operating — Simon Calder (@SimonCalder) June 22, 2025 Israel announced on Sunday (June 22) that it had closed its airspace to both inbound and outbound flights in the wake of the US attacks. The US struck three nuclear test sites in Iran overnight, prompting Tehran to launch a retaliatory ballistic missile barrage against Israel. Recommended reading: How does parking work at Heathrow Airport - All to know Can you still use a red passport for travelling in 2025? Furious Ryanair customer abandons holiday over 'ridiculous' £55 charge In a statement, British Airways said: 'As a result of recent events, we have adjusted our flight schedule to ensure the safety of our customers and crew, which is always our top priority. 'We are contacting our customers to advise them of their options while we work through this developing situation.' BA is offering a flexible booking policy for customers already booked onto flights to Dubai and Doha between Sunday and Tuesday who wish to change their dates of travel.
