Even more office jobs are expected to vanish, leaving even more vacant space behind.
By Wolf Richter for WOLF STREET.
Offices are already being abandoned on a large scale by companies that want to reduce their useless office space. Office availability rates in major cities have soared to 25% and even to 30%-plus, and have triggered massive repricing of office properties.
And now they’re facing another “existential threat”: AI. That’s what the CRE industry is worrying about.
Generative AI is already everywhere for all to see and hear and talk to, from articles in major publications to chatbots that annoy already exasperated consumers to no end. It’s heavily used in tech. It’s used in healthcare from writing up diagnoses produced by automated equipment to generating patient visit summaries off of recordings – stuff that humans had to do.
It’s a lot better than it used to be, but it’s still apt to produce hilarity. For example, the AI-generated headline on the Bloomberg Terminal today, by Bloomberg Automation: “Berkshire Hathaway Declines 100%, Most in at Least 36 Years,” it said about the technical glitch at the NYSE that caused Berkshire Hathaway Class A shares to briefly plunge by 99%, before the glitch was corrected. And in the text, it said hilariously: “the stock reversed the previous session’s gain… The stock was the worst performer among its peers.” And it failed to provide the most important context: that this was a technical glitch.
AI-generated stories have been published for years. Sometimes they’re reviewed or edited by a human, and sometimes they’re not. Even if they’re reviewed by a human, or if a human reporter used AI to generate a big part of the story, one human can now do the work that 10 or 20 humans would have done before. Sure, AI is known to produce “fluent bullshit,” but so are humans. And humans need editors too. And AI is starting to replace humans in these offices. And not just in publishing.
Cities with a concentration of sectors – such as tech jobs in Santa Clara – may be hit with a new wave of office vacancies, Julie Ingersoll, Chief Investment Officer for Americas Direct Real Estate Strategies at CBRE Investment Management, said at a CBRE event, according to Bisnow Commercial Real Estate News. Which jobs and the timing are uncertain.
“If we lose 25% of our [office] jobs in the United States — think coding jobs, secretarial, even sales-related roles — what is that downstream impact going to be on office, when we already have a 55-year high of office vacancy.”
“We think it’s going to have a pretty deleterious impact on office demand,” she said.
The sectors that are impacted span the spectrum. She cited one of CBRE IM’s student housing partners that recently leased 60% of all of its housing for the next academic year using AI, rather than brokers and in-person tours, according to Bisnow. She cited regulatory governmental roles and tech jobs.
The repetitive nature of many coding jobs means some office markets in tech centers could be at risk, Wei Luo, a director of research at CBRE IM, said.
This looming depopulation of offices due to AI would be in addition to the already rampant depopulation of offices due to working from home, and it would be in addition to the aftermath of “the War for Space” before the pandemic, when vast amounts of office space was grabbed for future use, and remained vacant, as companies expected to grow into it. But as working from home took over, they then decided they wouldn’t need that vacant office space and put it out on the sublease market, turning office shortages in the hottest office markets, such as San Francisco, into historic office gluts.
So now what?
“There will be some buildings that are easy to convert to apartments, but most are not,” said Kim Hourihan, Chief Investment Officer at CBRE IM, according to Bisnow.
“People ask me all the time, ‘Can office be data centers? Can office be warehouses? Can office be life sciences?’” Hourihan said. “In most cases, as we’ve seen with regional malls, the answer is: it’s worth its land value. The highest and best use is to scrap it and build something else.”
Surely, AI will also create a lot of office jobs, such as the roles involved in making AI work, improving it, and untangling the messes it creates on a daily basis. But a lot of office jobs that humans used to do are already getting done by AI, and many more will be done by AI (we can also see that many of the jobs that will be done by AI are now getting done by humans working at home, so there’s that). And for the CRE industry, this will be the next wave in the existential crisis of the office.
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Okay can we tell the CEOs to please stop laying off people then?
I’m waiting for the day that AI replaces some of those CEOs. That would save a lot of money.
No one outputs more “fluent bullshit” than a CEO.
Except for politicians. :)
CEOs/Politicians…same turkey, different farmx
Mr. R, you’re a smart guy, how can you fall for the AI propaganda. AI is a fraud perpetrated by corporations on the masses too stupid to think for themselves.
efromme,
I wish. Just talking about my own industry here: AI has been creating a lot of news articles, charts, and images for years. Reuters, Bloomberg, MarketWatch, many others have been publishing AI-created articles for years. Some with a small amount of human input, most of them without. The internet is awash with AI-created stuff without human input. In my own bailiwick, Wolf Street runs on WordPress, the hugest content management system out there; a gazillion websites run on it. WordPress also has a huge plugin, Jetpack, which offers a for-pay AI component that would allow me to generate articles via AI in seconds, fully integrated into WordPress. No human input required. Jetpack has been pushing me via emails to try it (for a fee). And many websites are using it because it’s so quick. So AI-created articles, charts, pictures, videos etc. are all over the place. You might not know when you read AI-generated content, but it is now everywhere. And some of it isn’t all that bad.
The thing that AI doesn’t do yet is connect with readers human-to-human, and it tries but fails at emotional aspects, including humor (but that’s hard for humans too).
Jobs in my industry are under serious threat from AI. I have to compete with AI-generated content that is now flooding the internet. I do my best to fight it off by trying to connect with readers, prioritize things the way only a human can for now, and offer up my sense of humor, which can be a bit dry and not to everyone’s liking. But AI is so much faster – it takes me 4-6 hours and sometimes a lot longer to handcraft my articles; which AI does in seconds, so I’m always hours behind AI. And AI can do lots of articles in the time that I do just one. Someday I may be outrun by the mass of AI-created content, and readers will flock to them, instead of reading Wolf Street. And that’ll be the end of my job and my Wolf Street Media Mogul Empire. This is a true possibility and I think about it every day.
Of course, I could switch to using AI to create articles that then would be just like all the others out there. But that’s not in my destiny; I’d rather go down in flames handcrafting articles and charts, than use AI.
Maybe “human intelligence” work can have its own acronym: “GI”. Not gastro-intestinal, but “Genuine Intelligence”. Further, if an AI system uses GI material, it should be subjected to punishment – financial and physical. In addition to a massive fine, it should be put into a gibbet, a virtual gibbet.
I’m pretty sure that once AI on the Internet reaches a critical mass, where the majority of it’s training data and information is being generated by other AI, it will begin to undermine itself. The problem with it is that its inherently “ungrounded” – it has no hard link to reality that serve to check and correct it, so as far as it knows anything is possible. It will always require it’s information to be originated by humans at some level, and the only way it survives to plagiarize that information. If blogs like Wolf Street go away because of it, then we’re all pretty much at sea. I do
Damn phone…I don’t think the demand for grounded information will go away.
The real benefit to society from AI is for it to replace most of our government! And, it surely could!
Well, except that AI attempts to be accurate and efficient, things that the government knows nothing about, so until it can remove logic and common sense from itself it won’t ever really replace it.
Wolf, thanks for doing what you are doing, I get the feeling that I am not only reading an AI generated article but AI generated “comments” more and more often (sometimes I wonder if a tech guy wrote a script that pops an random AI generated DFB post below every Wolf article)…
Absolutely :)
I hope YOU keep writing. Don’t resort to AI or ChatGTP. As for office space GM is moving out of the Renaissance Center to the Hudson building(looks like a smaller building than the GM Renaissance Center). There seems to be no future plans for the GM Renaissance Center which GM spent a tremendous amount of money to renovate.
And when AI replace the insightful analysis of Wolf Richter? I don’t see that happening soon.
This AI threat was the entire plot of the new series: “Battlestar Galactica;” perhaps it should be suggested that the Commercial Real Estate investors and mortgage bankers “binge watch” the series, because it has nothing to do with office space.
watch Escape from New York to see what could be next for office space in NYC in 50 years. NYC is repurposed into a prison. far fetched but something has to go down due to changes in working.
@ wjackmullen it may not be that far fetched since I just read this morning that “20% Of New York City Hotels Are Now Migrant Shelters”. I don’t see AI replacing CEOs anytime soon since it seems like that primary job of most CEOs today is making high level deals at the Bohemian Club and getting the government to give you tax breaks and make things harder for your competition with new laws.
What’s a lot of jobs being lost by AI? 135 or 150,000,000?
Seems like the employment numbers are good, so I assume it’s closer to 135.
And think of the implications for the demand for workers.
Companies are using AI to reduce costs and that will reduce the need for workers. Work that is done with say 100 workers right now can now be done with say 80 workers. It means that 20 workers no longer have a job. This reduces DEMAND for a whole range of consumption articles. This equals less demand for A LOT OF goods that are produced by other companies.
Conclusion:
Companies who are increasing productivity are actually also reducing demand in the rest of the economy, weakening the economy.
Economists think that increased productivity is good for an economy but in fact it is weakening an economy.
Mr. Keynes, I think you’re conflating improved productivity with demand. Consider the obverse: can you argue that decreasing productivity is a boon for the society and for a given company?
Thats not how a free market works. Those 80 people have improved productivity, thus improved money and will want to buy all types of services that they couldn’t before. Those 20 can get jobs working at new industries that the 80 now have access to.
150 years ago, 95% of the population were farmers. What I do for a living didn’t even exist 25 years ago. But now I can do it because I don’t have to farm.
I think that people are too bullish about AI. AI is after all a bunch of algorithms and they can take over repetitive tasks but AI can’t create anything. It still needs to have A LOT OF human input.
“…but AI can’t create anything.”
I wish!! So I’ll just repeat it here:
Talking about my own industry here: AI has been creating a lot of news articles, charts, and images for years. Reuters, Bloomberg, MarketWatch, many others have been publishing AI-created articles for years. Some with a small amount of human input, most of them without. The internet is awash with AI-created stuff without human input. In my own bailiwick, Wolf Street runs on WordPress, the hugest content management system out there; a gazillion websites run on it. WordPress also has a huge plugin, Jetpack, which offers a for-pay AI component that would allow me to generate articles via AI in seconds, fully integrated into WordPress. No human input required. Jetpack has been pushing me via emails to try it (for a fee). And many websites are using it because it’s so quick. So AI-created articles, charts, pictures, videos etc. are all over the place. You might not know when you read AI-generated content, but it is now everywhere. And some of it isn’t all that bad.
The thing that AI doesn’t do yet is connect with readers human-to-human, and it tries but fails at emotional aspects, including humor (but that’s hard for humans too).
Jobs in my industry are under serious threat from AI. I have to compete with AI-generated content that is now flooding the internet. I do my best to fight it off by trying to connect with readers, prioritize things the way only a human can for now, and offer up my sense of humor, which can be a bit dry and not to everyone’s liking. But AI is so much faster – it takes me 4-6 hours and sometimes a lot longer to handcraft my articles; which AI does in seconds, so I’m always hours behind AI. And AI can do lots of articles in the time that I do just one. Someday I may be outrun by the mass of AI-created content, and readers will flock to them, instead of reading Wolf Street. And that’ll be the end of my job and my Wolf Street Media Mogul Empire. This is a true possibility and I think about it every day.
Of course, I could switch to using AI to create articles that then would be just like all the others out there. But that’s not in my destiny; I’d rather go down in flames handcrafting articles and charts, than use AI.
@Wolf: Perhaps I am wrong but I think that run-of-the-mill articles found in Newsweek, Politico etc can be generated by AI. But if one is looking for depth, nuance, and insight – that is going to take a Wolf Richter…
Sean S. – agree, but would posit those of the audience desiring ‘depth, nuance and insight’ in their information diet must consciously struggle to not pig out too-much at the myriad, big and available tables of the tasty ‘junk food’ vendors on the streets where we live…
may we all find a better day.
Absolutely right. I refuse to read AI generated garbage just like I refuse to buy Walmart’s Chinese crap.
Wolf, don’t worry about competing against AI, it is just content scraping. And the content farms do nothing but feed pap to the masses. This pap is worth what it cost to make, namely nothing. Word salad machines. Faulty association machines. Is this really better? Or is it just a mindless spew like the orange one? I now find it amazing watching the media die from AI- hint folks in charge, it’s a flipping tool, not a giant brain the size of a planet!
On the other hand, is AI doing anything real for me? Is it giving me better health care through superior information. So far, no. I await some real gains in nearly anything. It serves me ads that piss me off and I block them. It serves information that is useless by the bucket. It does nothing in the real world. The effort it takes to find exactly what you want is also an effect of AI. Is Amazon getting better? Yes. Has ebay devolved into a poor copy? Yes. Would ebay be better served to have a new goods marketplace of freshly stolen items, and a separate area for real auctions of vintage crap? Uh, yes. Now, Costco serves the upper middle class suburban lifestyle par excellence, and Sam’s true middle class. Walmart feeds the world and sells crap. Nextdoor allows the Karens to report dead run over animals. I can’t stand farcebook.
Blah blah blah.
There are a lot of winners online and in the real, and AI powers some of it. But the moronic information uber alles AI rulz is simply too simple.
Look at insurance, with total information available, they should be able to just send a letter with an offer to sell me cheaper car insurance, house insurance, etc, for a longer term, with a custom term sheet based on what I have bought. Then send me to a web site where I can modify and get a true instant quote. Instead I get crap for sales intelligence, horrible websites, bait and switch, etc etc, etc.
This is the true problem. I like buying just what I need, nothing more. I also get tired of the continuous calls trying to sell me crap. Have I ever bought anything from an unsolicited sales call in my life? Well, then I am a black hole for those calls. Yet the phone rings.
Unfortunately, Citizen Allen, much of what you’re complaining about may eventually be cured with AI as it continues to improve itself. You may end up being left completely alone, waiting for the phone to ring.
People overestimate their I part of AI. Few people really *create* something. Most of them engaged in routine regurgitation of input and spitting of trivial output. In jobs like receptionist, tester or customer service clerk this is OK. In script writing and market analysis it is not. So AI can do ~80% of routine jobs and ~50% of “creative” jobs. Good enough to seriously affect CRE.
– I think blaming AI for the glut in office space is hilarious. It was companies who rented / leased / bought too much office space and are now stuck with all that empty office space.
RTGDFA. They’re not blaming the glut of office space on AI; they’re seeing it as the next shoe to drop in the future, on top of the glut.
Factories are going up. Offices are coming down. US is re-manufacturing. US is de-officing. We’re living thru the polar opposite of the late-20th century.
Seems so. Manufactoring jobs have become more “clean” and techy thou.
I was discussing a project. It was the first time companies are building plants in USA and we weren’t designing for manufacturing in Asia.
Correct. It not the 1970’s, it’s going to be more like the 1920’s.
“…it’s going to be more like the 1920’s.”
WB, that would be transformative! Compelling thought.
Hopefully we won’t have to deal with a replay of the 1930s or 1940s.
“We’re living through the poler opposite of the late 20th century.” (Offshoring I presume)
Makes me wonder, are these newly US manufactured products for domestic consumption, export, or both? If for export, how can foreigners afford them unless the dollar moves lower? Domestically, we may have the same problem as what has caused our nearly
$100,000,000,000 current monthly trade deficit—imports are cheaper to buy. And, some former US bond buyers are balking at continuing to fund our deficits.
Maybe Greatly improved productivity from all the new technologies & processes will overcome our higher standard of living costs, bringing a new competitive advantage. We need one.
Per Wolf’s last article: these factories are being built where there’s lots of available land.
Exactly the opposite of where these office towers are: cities.
If AI is truly successful then the whole economic paradigm is reset.
I think it’ll be net zero on AI.
Everyone will use it, get better, expectations on quality, ROI etc all raised, and perceived quality or VFM up… but that’s it.
Ie, normal technological progress.
Yep. Machine learning has been around for 50+ years and these algorithms are no different. The big difference is in the speed of the processors and the amount of data that is available. Unfortunately, most of the data is absolute garbage, so you need the faster processors to separate out the crap, and as we have seen already, even then the AI still fails.
Indeed. The fact the AI makes mistakes means AI can’t police itself.
Thus another technology, or skilled humans, need to filter it all.
At least in the area I’m most familiar with, image generation, the tags are the key…
And the tags have just been scraped from myriad sources with no consistency.
Metadata needs to be consistently applied to the entire dataset, itself a huge undertaking, and once again something AI can’t do without more training.
Ambiguity is the last thing you want from a tool but this is all you get.
Send. Wolf. Money.
The hardest truth in this post is how to convince folks that their precious building that once worth so much money now is only worth the land. Well, I guess it doesn’t matter because reality will kick your teeth in, no matter what you believe. Good luck.
If cars can drive around on crazy street with no driver, surely a robot masseuse can give me a back massage and perform other tasks , mow the lawn, take the dog for a walk.
The car part we already have. Waymo’s robotaxis are driving around just fine, including in San Francisco — one of the toughest US cities to drive in, due to congestion, lots of pedestrians and cyclists, narrow streets with parallel parking, and steep hills. Human drivers are terrible, causing all kinds of accidents, severe injuries, and fatalities.
In terms of your robot masseuse that can also mow your lawn, they’re working on it. It’ll be the next big thing.
They already have electric robot lawn mowers (like a Roomba robot vacuum for your lawn). They are popular on the SF Peninsula (with the people that also have Teslas, Roombas and Smart Refrigerators – That like to tell everyone about all these thing)…
Now all you have to do is expand the functionality of the robot lawnmower to also be your masseuse. You’re halfway there?
That sounds pretty dangerous. What if it accidently switched to lawn mower mode while giving a back massage?
elbowwilham,
I had to wait 6 hours to finally read this warning?
Mow your back and massage your lawn.
AI is about efficiency. It’s about replacing repetitive, routine, mid level “office tasks” with software that can do the job in one-one billionth of the time. Assembling data, generating reports, summarizing information. Floors and floors of former office workers who did this – spent the morning consolidating the sales reports, took four hours every Friday afternoon summarizing the production numbers – now AI does that at 4AM in a millisecond and it’s waiting in the correct email inbox.
Physical work can’t yet be done by AI. This country convinced ourselves that we should all get goofy talking/paper shuffling jobs like in “The Office” while the dirty stuff like unloading trucks and processing food and putting on roofs is done by those “migrants” who endlessly stream over the borders.
It’s all going to change. There’s no real purpose to the business districts in most cities anymore. There’s no reason for people to drive in or ride trains or subways when they can do that job from the suburbs or more likely a computer can do it from anywhere.
The real earthquake will be when Wall Street is abandoned for data centers in Texas or Arizona and that massive tax base leaves NYC permanently. For now there’s a panache in living in The City but the next big downturn is going to end that illusion once and for all.
>>Floors and floors of former office workers who did this – spent the morning consolidating the sales reports, took four hours every Friday afternoon summarizing the production numbers – now AI does that at 4AM in a millisecond and it’s waiting in the correct email inbox.
In reality, these “floors and floors of office workers” could’ve been easily abolished 20 years ago with proper reporting culture (and open standards). The toolset was largely there, but the willingness and desire to make things right never were.
And don’t get me wrong, AI is an **amazing** tool, I use it extensively for my side gig, I spent a lot of time researching OpenAI APIs and can’t stop being amazed by how much stuff can be done with its help.
However, I am not even worried too much about my job security. We have the whole team of business analysts whose only job is to make different entities “speak the same language”, so to say, and I can’t believe how insanely slow and painful this process is. For what it’s worth, I’d LOVE AI to finally replace some paper pushers who add nothing to the process, but stall any initiative and keep doing (and mandating others to do!) things the same way as they were done 20-30 years ago…
Well, what will happen is that AI will be used to replace the paper pushers blocking function.
Howdy City Slickers. I ‘ ll take Green Acres for 1000 Alex.
What city is made up entirely of row houses and office buildings?
Never mind Alex, I quit.
Green Acres? I’ll order my robot to talk like Zsa Zsa Gabor.
Howdy Shiloh. YEP, This has been a AI Filmsway Presentation Darling
Loved the one where he painted the house and the house made noises ….My first starter home was worse than his………
Watching Green Acres as a child it didnt seem odd to me that a farmer would climb a telephone pole to use the phone….
Howdy kramartini. Hank Kimball represented Govern ment perfectly also. Mr Haney represented lobbyists…..
Green Acres was ahead of its time in pointing out the inefficiencies of the monopolistic phone companies.
Cherry 2000.
Howdy Folks In case you were wondering, the answer is.
San Fran
Sorry Lone Wolf, nice place to visit for a day or so. Too many people in such a small area for a Bubba…………
““If we lose 25% of our [office] jobs in the United States — think coding jobs, secretarial, even sales-related roles — what is that downstream impact going to be on office, when we already have a 55-year high of office vacancy.””
Forget about the office space. What about the people’s jobs? When we get to the point where 25% of these jobs are lost, there’s going to be MASSIVE social unrest. We are on the cusp of such a significant disruption to the labor market that it’s simply unbelievable that Congress & the companies creating this stuff aren’t scrambling to get out in front of this.
I’m a HS math teacher, and I can already see there’s this trend that the value of education is eroding right in front of our eyes. This erosion will become a snowball, once AI shifts from making people better at their job to replacing them.
The real question is this: How long does this “honeymoon” period of making people better at their jobs last? Because what comes next will be hugely disruptive. My guess is that this transition will not be nearly as long as people may think it’s going to be.
I read 2 years ago where this company had developed AI that was 86% accurate in diagnosing medical problems compared to 95% for real doctors. And that was two years ago. I certainly wouldn’t be going to school to be a radiologist nowadays. Those jobs are going to be some of the first to get wiped out.
Seems like a highly deflationary situation. However, with the supposed population decline expected over the next decade or so ( see China, Europe, Japan US, ECT) perhaps this won’t be such a tender box of unrest. Thoughts Wolf?
Any student who learns mathematics along with other valuable skills will never want for a job. AI will take the grunt work jobs that no one really wants to do anyway. The jobs that require creativity and clever thinking outside the box? It will be a long time before AI writes “To the Lighthouse”!
Escierto wrote: “Any student who learns mathematics along with other valuable skills will never want for a job. …”
I wouldn’t be so confident about mathematics. In High School we had to buy slide rules for math class because it was what “they used at NASA.” My little Dollar Tree calculator does everything that slide rule did, only faster and a lot more accurately.
I recall my middle school math teacher saying “you’re not going to walk around with a calculator in your pocket!”
Ironically, a TI-89 graphing calculator was a prerequisite for the advanced math I took in college.
…and prior to those times, the slide rule (if you learned to use one) and its various levels of cost/sophistication was an enormous advance over pencil&paper (if you weren’t a math-brain savant) and the bound books of precalculated (arrived at by p&p calculation) tables (the history of the slide rule’s invention makes interesting reading, especially it’s subsequent role in 19th/20th century engineering). Would posit that slide rules had a hand in the development of pocket calcs like the HP35, then the TI-16 (first ‘affordable’ calc for college students in the early ’70’s). We ride the shoulders of those people and creations before us…
may we all find a better day.
I still use my TI-35 Plus from 1986. It replaced an earlier calculator that replaced my engineering school mandated slide rule (the school’s computer was a modified CDC 8090 computer – 8k of 12 bit memory, but with a 600 LPM printer, so not that much competition there).
At least on electronics we have all found a better day.
GW,
I’m a recently retired HS teacher and I think that you’re spot on: “What comes next will be hugely disruptive.”
I saw the majority of my students go off to four-year universities for an education toward their career of choice. Most did not finish, dropping out after a year or so, for whatever reason. The ones that did graduate from the university — that I know of — never found jobs that paid well. Most ended up in jobs that were not related to their degrees; the all-too-common psych majors who became baristas. Only a handful of my students had the chops to became engineers and they all found decent jobs.
The exception to the above were those students that went on to vocational training at a community college (two-year schools). They often ended up making a higher income than me after a couple years and most were recruited right out of school.
Lesson: I should have gotten into the trades instead of education!
:)
Ahh MiTurn, good points.
I started working for my older brother building houses while still in high school, (early 70s), and then did construction work long enough to get inter-provincial red seal certification. Went commercial flying off and on but always returned to construction. Taught carpentry and mechanics for 15 years as well. Some years I worked at all three trades/careers. The great thing about carpentry is you get paid from both ends, as a wage and in savings doing your own work. My parents freaked out when I didn’t go to uni, and rejoiced when I finally completed a degree at age 40, mostly by distance learning. They thought I would be a lawyer. nahh
Anyway, a few examples. Sitting at my kitchen table pecking at this while looking out over a tidal river in a house I built myself. The work table is my own design built out of old growth fir, and all the furniture was handmade as well. Everything I can see I built/installed… concrete, the building(s), furniture, flooring, drywall, kitchen and all cabinets, bathrooms…and all furniture except for a couch and loveseat and the necessary bedding. The bed frame is based on an old Swedish design with no metal in it at all. It fits together with sliding dovetail joints and hidden wedges. I could never live like this unless I was rich, or my wife was wealthy. Never happen. When I dated my wife I built her a hope chest and some coffee tables. We still have them.
Retired at 57 and took a 7 month welding course. Built my own 40 ton log splitter, a truck box, a boat, a;ways building something. It’s fun. Just a few hours per day gets it done. Mornings only, or when the tide is wrong for fishing. :-)
Individuals and business will always need some plumbing done, electrical work, new construction, or repairs. Windows break. People will always need health care. There will always be law enforcement. What people need to lose is their bias about trades, and their bias for post secondary. My sister, and I love her to death, often argues that university is where you learn to think and where you learn values. Needless to say we don’t agree. :-)
Regards and enjoy retirement
Paul S, I spent the last 8 years of my career as an educrat trying to promote the trades to high school students. It was a real uphill battle in an affluent community where the parents were mostly indifferent and occasionally hostile. Stories like yours were what kept me going.
I am not a teacher but have observed my own children and friends children graduating with business and STEM and education degrees from state schools and lower cost private schools with scholarships and some work during school with little debt and solid middle class to upper middle class work in their chosen fields. Ambitious people who minimize college debt and prepare for a career with their studies are still doing well, some very well.
People spending 100K per year with only vague ideas of how to link their studies to a career are wasting their parents (or more likely, taxpayers money).
And lots of people can do very well in the trades or as an entrepreneur.
You’re completely missing out on what’s coming. Once AI really gets rolling (my guess within 10 years), it’s not going to care who you are, what college you went to, your degree, your skills, your ambition or whatever.
Again, we are fast approaching the point where HUMANS will not be able to keep up with AI & ROBOTICS. The reality is that we’re probably about 80% there.
It’s being sold today as something that will make you better at your job. At some point not too far down the road, it’s going to replace you.
That’s the take away. Not some pie in the sky ambitious people with minimal to no college debt are going to be just fine.
That’s utter nonsense.
GuessWhat, people are in denial. It’s a natural reaction. I’m sure the pony express riders thought that telegraph was a wild and crazy thing and buggy whip manufacturing was a permanent trade. And that human creativity, as little as there really is, cannot be replicated.
“When we get to the point where 25% of these jobs are lost, there’s going to be MASSIVE social unrest.”
I dunno – right now we have the opposite problem; structural labor shortages. If anything, former white-collar employment will have too much labor supply, but these workers will eventually accept reality and filter into the jobs that are needed.
“I’m a HS math teacher, and I can already see there’s this trend that the value of education is eroding right in front of our eyes.”
My spouse is an 8th grade ELA teacher and I agree with this. Many kids don’t even pretend to pay attention – they just don’t care. And it takes away from the kids who do want to learn.
Ha ha AI replacing physicians in 2 years. Vinod Kholsa, venture capitalist, predicted in 2017 that we wouldn’t need radiologists in 5 years. Wrong. AI will eventually replace much of the pattern recognition parts of medicine, I’m not at all sure of the time frame, but as someone who actually uses some of these algorithms in the actual practice of medicine, and who sees how very limited and sometimes straight up stupid they are, it’s definitely not in 2 years, and probably not in 5.
Besides, who would malpractice attorneys sue if AI takes over?
I would hazard a guess that VC is at much higher risk of being replaced by AI algorithms, the financial calculations they make are way less complicated than the human body. And I would love to see those smug money changers hoist on their own petard. Let the algorithms sort all opportunities and crunch the numbers for a few people to act on. I’ll bet AI could do this better than Vinod and his massive green investment black hole.
I’m retired. AI can’t replace me and play golf once per week. And it can’t replace the Hispanic guys who cut my grass and leave their chicken bones all over the yard. Maybe it could replace them and I would like that!!
We all want to think we are special and more creative than the next chump, so sad it is not true.
How many engineers or bankers do you need when a computer can do an redo all the scut work in moments? The point it will not all be low end jobs.
Office job, work at home job, homelessness!
It will be so nice when I can shop and invest and never need to interact with another talking monkey! Oops I can already do that!
If office space is only worth the land value, a 44 story building is worth 1/44th of the ‘space’, right?
WSJ: The US Dollar Is at Its Strongest Since 1980s.
Wolf, I always appreciate your take on the financial world as well as your desire to keep AI out of your news feeds; but how will the audience know if your output is authentically from you in the future? May I suggest that you throw in some spelling errors or sentence fragments in your text as a sign of an authentic human content producer. As we all know, illogical or factually incorrect content is not necessarily as sign of a human producer, but uncorrected spelling and grammatical errors likely is.
I predict that errors of this type may become the mark of authenticity in the future, to the dismay of our grade school English teachers.
“how will the audience know if your output is authentically from you in the future? May I suggest that you throw in some spelling errors…”
I’ve been doing that quite a bit, as you can tell from the comments where readers point them out so that I can fix them. I nailed that part, LOL
Spelling errors and grammar are the best way to know you are actually reading human created content.
I’m not an AI guru, but it seems pretty easy to me to ask the AI to put in some random misspellings, maybe three per article, and add a disclosure at the bottom: “Please forgive any typos; my wife left me today out of the blue, and I cannot think straight.”
“chatbots that annoy already exasperated consumers to no end”
As a real human who answers chats for work: most questions I get on my chat could be answered with a simple google search – not even AI is needed.
I like the idea of personal, human-to-human customer service; but I myself get exasperated when people message my chat and ask things like “how late is your store open,” or “how much memory does xyz model have.”
Also, Wolf: last sentence of the 4th paragraph, I think that ‘if’ should be an ‘it’ instead.
This proves that I totally nailed it, in terms JeffK’s suggestion above that I use spelling errors to show that the article was written by a human, not AI.
LOL I was thinking that when typing the comment. Its refreshing to see organic human errors.
Wolf,
The elephant in the room with AI is whether job losses will come from AI getting better, or employee work product getting worse (or both).
For example, human produced news articles have been steadily getting worse for decades. Obviously, there are some excellent journalists, but a lot of the human written articles exhibit obvious personal bias, lack context, omit facts, etc. In my opinion, the average news article written by a human has gotten significantly worse over the last 30 years.
AI has similar problems, but it is dramatically cheaper than human written articles.
Perhaps we could look to the dawn of the assembly line for an analogy. About 90% of the shoemakers were out of business once the assembly line production of shoes took off. The top 10% were fine, and perhaps even did better.
Do you see a similar trajectory for office workers/journalists/coders/website designers, etc.?
Or something different?
I see the progression of AI similar to the Habsburgs royal family. As time goes by, AI is going to use training data AI created and will become more and more “inbred”.
Mainstream media is appallingly bad and biased, far worse than 20 years ago. AI is way less biased but also unreadable to me anyway.
Tulip – given the now-universal soapbox of the Internet and its concomitant shortage/decline/outright absence of a qualified cadre of EDITORS (our esteemed host among the shining exceptees) to qa journalistic output, little wonder that this degradation of ‘the average news article’ has come to pass…
may we all find a better day.
DM: Beloved Mexican chain, Rubio’s Coastal Grill, abruptly SHUTS 48 restaurants in California as state’s $20-an-hour minimum wage has its first casualty
The ‘rising cost of doing business in California’ is being blamed by the bosses of a fast food chain for its sudden shuttering of restaurants – leaving workers stunned.
California’s $20-an-hour fast food minimum wage has its first casualty.
Mexican chain Rubio’s Coastal Grill is shuttering 48 restaurants in the state – because of the ‘rising cost of doing business in California’.
‘While painful, the store closures are a necessary step in our strategic long-term plan to position Rubio’s for success for years to come,’ a Rubio’s spokesperson added.
The San Diego-based chain is known for its fish tacos. In fact, founder Ralph Rubio is credited with introducing them to Americans.
He discovered them while on spring break in Baja California in Mexico in the late 1970s and opened a stand selling them in San Diego, where he had been a college student, in 1983. It earned him the title of San Diego’s taco king.
“beloved”?? LOL. worn-out chain restaurant from the 1980s that was hot when I was young, that barely survived serving so-so to crappy food amid lots of young competition serving delicious food. They changed their name three times to try to re-brand because customers have abandoned those crappy restaurants in droves, long ago. Every taco truck serves better food. Now they blame the higher minimum wages for their ills? LOL these lying idiots! Glad they’re going to hell. Let someone fresh move into that space.
SoCalBeachDude,
I like Rubios but will all businesses some locations do well and some don’t. This is just convenient for them as can put the press on someone else. Most chains raised prices in the 5-15% range like dominos going from $6.99 to $7.99 in California. Given the cost of living here I am happy to drop a few extra bucks as of I don’t have that extra money I shouldn’t probably be eating out as much.
Ralph Rubio’s payday was when the company went public. It was ridden into the ground and went t*ts-up in 2010, bought by a P/E firm which eviscerated the operation further.
Now the minimum wage raise is being blamed, not the deterioration of the quality of food and service, not the rapid overbuilding that followed the IPO, not the awful business planning and operation.
AI is just the latest round to have people look at technology and see the impact on jobs. Bad comparison but ATMs probably eliminated a lot of jobs.
I look at the issue from more an economic system perspective than a lost employment issue. We live in a system whose goal is to maximize profit which from a cost perspective usually means labor. This of course has been happening and you could include off shoring.
Ideally would be nice to flip the paradigm and realize society collectively needs a lot of workers and that the system to reflect the needs of the many. That is of course connected to state of education and healthcare and other things. Ideally repetitive tasks would be eliminated, work hours reduced, and more focus put on the living and connection life has to often rather than the grind.
This is nothing new. Barcodes eliminated many jobs. Direct dial trashed telephone operators.
Anyone remember prices on every can at the store?
AI is not new and the new name is just wallstreet bs.
Once we get past the hype, it will change everything.
While your at it, blame China for all our failures.
My opinion is that AI is going to result in a productivity increase but not as drastically as the masses think. I have tried using it to solve tough problems in my job (programmer) and AI can’t do it. It is usually incorrect or just summarizes things I already know nicely for me.
It would have been a bigger boost earlier in my career when I was still green. Plus I doubt it will be able to deduce what the software requirements actually are from the business folks who know they want something but aren’t sure what it is.
@Midwest Ralph,
I’m a longtime coder as well. Was going to mention almost the same sentiment. What someone feeds into AI is what someone gets out. Product and project manager’s can’t seem to decide what they want, when they want it, and then change their minds on a dime. A good portion of the job of a developer is being able to interpret what someone wants based on the flimsy information given and then make it work (playing nice with the network, DB, servers it’s running on, etc).
And just like self-driving cars, an AI system would also have to learn to play nice with everything that has already been built that’s going on around it too (oftentimes pure chaos). Not a lot of greenfield only work out there.
I’ll be very impressed and worried when AI can manage all of that.
“What someone feeds into AI is what someone gets out. ” The old computer term in the 60s was GIGO (Garbage In Garbage Out). I miss hearing it.
I find that ChatGPT is quite effective at whacking up unittests and docstrings for code. It is also fairly decent at solving well-known problems such as “a function that does X with input Y and returns Z”.
It is very good at answering specific questions about Python libraries that is has “read” the source code for – like “Which exceptions can be raised by datetime.fromisoformat()”.
It’s Google without the crap!
We better make the most of it now, because, within 2-3 years the dialogue will be infested with adds and sponsored content.
“AI” has become a catch-all-phrase for a number of technologies: neural networks, logic programming, some more exotic stuff like fuzzy logic or genetic algorithms. Every software that has some sort of “learning” component is labeled “AI” these days. But here’s the catch: nothing about this is new. These technologies are over thirty years old. Anyone using a parking assistant uses “AI” and has been for decades. Anyone using a translation program uses “AI” and has been for decades. The first computer games using “AI” go back to the Playstation 1 in the 1980’s. That means everything that can reasonably be done with “AI” is done. This is a mature run-of-the-mill technology. Nothing about it is new or “revolutionary”. It’s not like the internet in the 1990’s that was really new at the time. It’s more like someone running for the Nobel price in physics because they just discovered quantum mechanics. And Wall Street jumping on it of course. And the chips of a certain company only are good for one part of “AI”, the neural networks part. For everything else, they are completely useless.
The first complete description of what was to become Windows and the Internet was published in Computer Decisions in 1969. Unfortunately, there was not one single computer in the planet that could run it so it was forgotten except for a few at Xerox PARC.
The stock market hype is also not at all new. I made a bit of coin in the 80s on investing in IPOs (and getting out of them quickly) that planned to make “neural net” chips…
Like all changes I believe the impact will be gradual. It might as well happen because I’m getting tired of human-generated fluent bs. No reason those jobs should continue to exist, they aren’t adding any value anyway. Let’s start with sales people.