AI: Threats & Opportunities (Part I)

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Parisa Vinzant
October 25, 2024

Paralysis on AI regulation at the federal and state levels has been the status quo in the United States for some time. Unfortunately, this failure of governance places a rubber stamp on unfettered and potentially reckless innovation by private industry. Without common-sense external oversight and policy guardrails for AI innovation, many people’s very ability to seek and sustain employment in their areas of work are at risk. The latest global research shows that advanced countries like the U.S. are better positioned than emerging countries to obtain more of the benefits than the damages from AI if their governments establish suitable regulatory policies and labor reallocation programs.

Yet the rapid pace of innovation, especially generative AI, is unprecedented and most policy leaders are largely ill-prepared to meet this extraordinary challenge. The first stumbling block is governments’ innate resistance to change. Not only that, but U.S. policymakers often face the implied threat from industry that if regulation is imposed in one state, AI tech companies will move their businesses elsewhere, with severe economic consequences for the regulated state. Further, global investment in generative AI has skyrocketed over the last year, along with an interest by countries in maintaining sovereignty over that technology with the expectation of securing a national security advantage. These factors all contribute to the slowness of US policymakers to address threats posed by AI. This reluctance to regulate AI, even the pragmatic balance struck by the now-defeated California AI safety bill, signals government’s willingness to let industry dictate policy and thereby the future of work and the ability of people to thrive.

Policy inaction at this critical time creates real threats to local and regional economies if public servants are unaware of the most likely impacts of AI innovation on their communities and the health of the overall workforce. However, educating themselves with the most-trusted and latest research would open the door for vital strategic planning to mitigate some of the expected risks and create workforce development opportunities. Local public servants responsible for advancing digital inclusion, technical advancement, innovation, economic development and workforce development are all front-line leaders in this new AI frontier.

While it is impossible to know precisely what the full risks and benefits of AI would be on local job markets, a 2024 economic paper by Yueling Huang provides crucial insights gained from research studying the impacts of AI on U.S. labor markets during 2010 and 2021. Huang found that regions with a higher share of firms adopting AI experienced more significant decline in the overall employment-to-population ratio during 2010-2021. Further, these regions saw more unemployment of men than women, and as well as those in manufacturing and low-skill services sectors, middle-skill workers, non-STEM occupations and very young and older workers. These unequal impacts of AI are like other technology-spurred labor market disruptions from robotization, offshoring and import competition, which Huang states require policy consideration of social safety net and job retraining programs.

Knowing how the most recent wave of AI innovation has disrupted local job markets is imperative if public servants are to more accurately assess their own labor markets and plan for the current and future waves of AI, of which generative AI is a major catalyst.

A 2024 International Monetary Fund study by Mauro Cazzaniga and other authors estimates that in advanced countries like the U.S., about 60 percent of jobs are exposed to generative AI, of which about half may be negatively impacted. In contrast to past labor disruptions from new technology, high income earners as well as women and college-educated individuals will also be negatively impacted from AI, but unlike middle-skilled and older workers, these workers will better be positioned “to reap AI benefits” because of “AI complementary.” Potential AI complementary exists when a negatively impacted worker from AI can leverage the benefits of increased productivity through integrating AI tools and know-how. It is only through maximizing AI complementary that workers affected by generative AI can minimize the negative impact to their jobs, income and wealth generation potential. Such workers must be flexible and able to change from jobs at risk of displacement by AI to jobs with strong AI complementary, but factors such as income, age, family responsibility and education level can create barriers to such adaptability.

For advanced countries like the U.S., Cazzaniga and authors advise the development of regulatory frameworks “to optimize the benefits of increased AI use and invest in complementary innovation” with the goal of maintaining social cohesion. They call upon policymakers to take a proactive approach in creating equitable and ethical integration of AI and to “protect and help retrain workers currently at risk from disruptions.”

AI innovation is extremely fast-paced and uncertain, and when considering the entrenched stagnancy at the state and federal levels to regulation, the verdict is clear: our country is severely unprepared to maximize the benefits rather than suffer the harm from AI. But waiting for this situation to change is unthinkable because the burdens of unregulated AI disproportionately fall onto individuals to shoulder, and unlike governments, they have limited capacities to respond. 

Local public servants must act to help their communities prepare now. In Part II of this series, strategies in areas such as digital inclusion and workforce development will be explored for wins in the short and long term. Through preparation the negative effects of AI may be lessened, and its potential promise unlocked for more people.

---

Author: Parisa Vinzant, MPA, works as a private and public sector strategist and equity/inclusion consultant. She also provides coaching to ICMA members. She served as a technology/innovation commissioner in Long Beach, CA. Parisa applies an intersectional equity lens in her writing exploring topics ranging from ethics, education, democracy, technology, and community engagement. All views are hers alone. Contact her at: [email protected].

 

(3 votes, average: 5.00 out of 5)
Loading...