Is AI undermining labor market intelligence?
Investing.com -- Artificial intelligence is disrupting the labor market, not only by changing job roles, but also by distorting how labor market data is collected and interpreted, according to UBS.
The chief economist at UBS Global Wealth Management said in a note that while AI often raises concerns about job displacement, it also creates "new jobs in different sectors" as it improves efficiency.
However, they noted that AI is already affecting technology employment trends.
“Around the world, employment in technology sectors seems to have stalled over the past year,” he wrote, suggesting companies are “delaying recruitment while they consider whether AI might make some jobs obsolete.”
Beyond employment figures, AI is said to be complicating how economists interpret the labor market.
"AI has made it easier for candidates to make multiple job applications than was the case in the past," UBS wrote.
Additionally, it “may also allow more job applications to be processed—lowering the cost of ‘speculative’ job adverts.”
According to UBS, this results in more applications per candidate and potentially more job listings, distorting traditional metrics.
These distortions are seen as especially problematic given current challenges with labor data collection.
“The distortions that AI makes will undermine the use of ‘big data’ labor market information, making historical comparisons difficult,” the bank explained. They added that this comes “at a time when collapsing survey response rates make official data less representative and more guesswork.”
UBS warns that while AI promises long-term gains, it is currently clouding near-term visibility into the true health of the labor market, complicating efforts by policymakers and investors to interpret trends accurately.
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