MIT & IBM on Future of Work: AI Adds to ‘Middle Class Squeeze’ 

MIT and IBM have released the results of an eight-year study casting light on the impact AI and machine learning have already had – never mind the impacts to come – on our jobs, our incomes, the kind of work we are more and less likely to do and the value our employers place on that work. Among the trends in which AI has factored: the “middle class squeeze.” The result: wages are increasing at the lower and higher end of the income scale, less so in the middle.

The good news: “While most jobs will change as new technologies, such as AI, scale, the research shows few jobs will actually disappear,” MIT and IBM said of their findings. “What is fundamentally changing is the way we work.”

They also said that while AI’s impact on work has been slow so far, it is gaining speed and will continue to accelerate as adoption of AI becomes more widespread.

The study, “The Future of Work: How New Technologies Are Transforming Tasks,” based on analysis of 170 million job postings from 2010-2017, found that tasks increasing in value across both higher and lower wage livelihoods are “grounded in intellectual skill and insight as well as require, to some degree, physical flexibility, common sense, judgment, intuition, creativity, and spoken language…”

In higher wage business and finance occupations, the researchers found that “the annual wages for industry knowledge tasks have increased in value between 2010 - 2017 by $6,387 on average, while the annual wages for manufacturing and production tasks have decreased in value by $5,218 per year, on average.”

In lower wage personal care and services occupations (hairstylists, recreational workers, fitness trainers, etc.), the study found that annual wages for design tasks – like presentation design or digital design – have increased between 2010 – 2017 by $12,000, on average among these workers.

“In fact, design tasks – graphic and visual design, industrial design, user interface, user experience, and presentation design – have increased in value consistently across occupations and wage groups,” the researchers stated. “In mid-wage sales occupations, the value of design tasks increased annually by $8,522. And, in high-wage computer and mathematics occupations, the value of design tasks increased annually by $6,011.”

In middle wage occupations the researchers said workers are being squeezed, with data showing that tasks have shifted from mid-wage jobs into low- and high-wage jobs at a rate of 4-to-1, resulting in mid-tier wages rising slower than at the high and low ends. “Low-wage workers gained an average of $600 in annual compensation more than mid-wage workers,” the study stated. “High-wage workers gained an average of $1,200 in annual compensation more than mid-wage workers over the same period.”

The researchers noted that even as strong employment growth has prevailed throughout the 2010-2017 study period, workforce transformation has resulted “in the overall demand for tasks that make up occupations are down… Across more than 18,500 tasks, for each occupation, on average, workers were asked to perform 3.7 fewer tasks overall in 2017 than seven years earlier.”

“The decreased task requirements may likely be due to employers seeking greater focus from workers and the early adoption of AI and machine learning,” the researchers said, “indicating a fundamental shift in the way work gets done.”

"As new technologies continue to scale within businesses and across industries, it is our responsibility as innovators to understand not only the business process implications, but also the societal impact," said Martin Fleming, vice president and chief economist of IBM. "To that end, this empirical research from the MIT-IBM Watson AI Lab sheds new light on how tasks are reorganizing between people and machines as a result of AI and new technologies."

Tasks Increasing in Value Tend to Require Soft Skills