AI and Jobs - Creator, Destroyer, or Just Another Tool?
Artificial Intelligence (AI) has unsettled many sectors, especially in the knowledge economy. More businesses are experimenting with AI, and with that comes a big question, what does this mean for jobs?
Should we be worried that AI will replace us all, leaving the tech overlords to rule the world? Or should we be racing to adopt it, confident that new jobs will spring up as a result?
As with most things in economics, the answer is rarely black and white. At the moment, three broad scenarios are being debated:
AI as a job creator - AI augments existing roles, boosting productivity and profits. Firms can then reinvest to grow and create new jobs.
AI as a job destroyer - AI makes it cheaper and easier to replace routine knowledge work. Roles like customer service, entry-level software development, and digital marketing are already vulnerable.
AI as neutral - AI doesn’t directly add or remove jobs but reshapes how we work, but what it does do is free up space for upskilling and diversification.
Changes in the travel sector
Take travel agents as an example. Their role of planning, budgeting, booking, and tailoring trips could be 80-90% automated by AI. Many of us already research and book online with AI support, arguably making travel agents less necessary. Yet job decline hasn’t shown up in the data. Why? Either because AI adoption is still uneven and customers aren’t yet using AI to its full potential or AI is being adopted but doesn’t have the full capabilities and features to replace a human.
The case for job losses
Evidence from the U.S. suggests that AI is already reshaping entry-level employment. As highlighted in Bharat Chandar’s ‘A Primer on “Canaries in the Coal Mine? Six Facts About the Recent Employment Effects of Artificial Intelligence”’, the early signals of disruption are showing up in hiring data. Firms exposed to AI tools are pulling back on recruitment for junior roles, particularly in areas where AI can easily substitute for human labour. Specifically:
Customer service representatives where AI chatbots handle inquiries with growing sophistication.
Entry-level software developers where AI coding assistants are increasingly capable of writing functional code.
Marketing support roles where AI can generate and deploy entire campaigns.
What’s striking is that these aren’t abstract possibilities. Hiring patterns already show a decline for younger, less experienced workers. Mid-career employees, by contrast, appear to be more resilient. Their accumulated expertise, leadership skills, and ability to integrate AI into workflows make them harder to replace.
Employment by AI exposure for 22- to 25-year-olds, normalised to 1 in October 2022.
Employment by AI exposure for 41- to 49-year-olds, normalised to 1 in October 2022.
This points to a troubling dynamic. If AI disproportionately reduces entry-level opportunities, younger workers may find it harder to get a foothold in industries, even if senior jobs remain stable. Over time, this could reshape career pathways and widen inequality between cohorts.
The case for job creation (or at least transformation)
The picture in Australia is more optimistic. The Jobs and Skills Australia ‘Our Gen AI Transition Report’ argues that AI is less likely to eliminate roles than to evolve them. Entry-level jobs, in particular, are expected to change in nature, not disappear. For example:
A junior customer service worker might now handle only the more complex cases, using AI to manage routine inquiries.
An early-career software engineer might spend less time debugging code and more time designing solutions and collaborating across teams.
Marketing assistants might shift from copywriting to strategy, letting AI generate drafts but retaining responsibility for brand tone and campaign direction.
In this framing, AI becomes a lever for productivity and efficiency, creating space for workers to focus on higher-value tasks. Rather than a shrinking labour market, firms may see the opposite - growth fuelled by reinvestment of efficiency gains.
The report also emphasises sectoral differences. Some industries, such as professional services and tech, may see AI accelerate change. Others, particularly those built around interpersonal interaction (like health and care), are more likely to integrate AI in ways that complement human labour rather than replace it.
What we still don’t know
The reality is that we don’t yet know which of these futures will dominate. Some of the key questions we should be thinking about include:
Will AI permanently displace certain types of workers?
How easily can displaced workers transition into growth areas such as the care economy or renewable energy?
Will AI mainly augment entry-level jobs, rather than remove them altogether?
The conversation continues
AI’s impact on jobs is likely to differ across sectors and countries. More time, data, and research will be needed before we can say with confidence whether AI is a net creator, destroyer, or neutral force in the labour market.
What is important though, is that we shouldn’t be scared of AI but rather think of how it can be used ethically and effectively as a complement to our skills and human experience.
