This article originally appeared in the Future Economy. Below is an excerpt from the article.
By Philip Cross, January 29, 2023
Despite all the hype and fear-mongering surrounding the deployment of AI, there is little evidence it is having a perceptible influence on Canada’s economy at the macro level. This is not because AI is too recent an innovation for its effects to be felt. For years, proponents of AI predicted that by 2023, it would have a discernible impact on our labour market, with measurable job losses, surging productivity, a widening of income inequality, and a shrinking middle class.
The State of Canada’s Labour Market Today
The reality of Canada’s economy contradicts these forecasts of how and when AI will impact our society. Today’s labour market is characterized by near-record low unemployment, rising incomes for white-collar, middle-class workers, and slumping productivity. In particular, Canada’s track record on labour productivity coming out of the pandemic has been dreadful, with eight declines in nine quarters for a cumulative loss of nearly 6%. Such a downward spiral threatens our standard of living, our ability to contain inflation, and our capacity to service the enormous debts all sectors of the economy assumed during the pandemic.
Fears about job loss due to automation have always been overstated in the public’s mind. Back in 1989, Statistics Canada reported a majority of Canadians felt computers and automation would result in job losses. However, another study found that in reality, “firms that invested in robots… employ more, not fewer workers,” because robots were used more to improve product and service quality than to lower labour costs.
The Future Economy