Transformation in the U.S. Labour Market Artificial Intelligence and Occupational Polarization in the 21st Century

Eduardo Ananiades and Daví Antunes

MPRA Paper from University Library of Munich, Germany

Abstract: The improvements in artificial intelligence (AI) and data processing technologies have renewed the question posed by John M. Keynes in Economic Possibilities for Our Grandchildren. Particularly regarding the expectation of human emancipation from material survival as a result of technological progress, the possibility of seeking purpose and fulfillment is revived. However, new technologies have driven the economy towards an ontological reduction that subordinates the human being to abstract economic relations, reducing labor and work to exchange-value. Hence, labour ceases to be a process aimed at satisfying concrete needs and becomes, instead, an economic function restricted to the market and production. This paper is organized into two primary sections. The first provides a diagnosis of the U.S. labor market, which is characterized by an increasing polarization between high- and low-skill occupations, alongside a narrow labour structure of typical middle-class jobs. The segmentation of the labor market takes shape as the manufacturing sector loses its centrality and the service sector becomes more significant to the U.S. economy. This dynamic unfolds as financial deregulation and neoliberal policies shift economic structures toward speculative wealth accumulation, diminishing industrial job opportunities and polarizing the labor market into highly skilled, well-paid roles and precarious, low-skilled positions. The second section examines how AI technologies have transformed the tasks performed by certain jobs and the hierarchical and economic interaction within firms, altering the qualification requirements, especially for corporate-level jobs. The competition for high- and low-skill occupations intensifies. In the first case, the demand for constant updating of technical competencies and knowledge to complement AI systems increases. For low-skill occupations, fierce competition takes place due to the simplification of tasks, allowing less-skilled workers to perform the same functions. Therefore, the integration of AI into the labor market exacerbates wage disparities and affects opportunities both across and within different segments of the working class, increasing the demand for highly skilled workers while simultaneously reducing opportunities for those in low-skilled positions.

Keywords: United States — 21st Century; Artificial Intelligence and Technological Transformation; Labor Market; Labor Market Polarization; 4.0 Technologies — Impacts on the Labor Market (search for similar items in EconPapers)
JEL-codes: J21 J24 O33 (search for similar items in EconPapers)
Date: 2025-01-23, Revised 2025
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