Is AI stealing our jobs? The impact of the technology on the labor market transformation

The changes that Artificial Intelligence is bringing to the labor market are only just beginning, and the coming decades will mean a redefinition of the way we work. In Romania, however, besides Artificial Intelligence it seems that we still have some work to do in developing human intelligence and skills. To cope with working life in the coming decades we will have to make AI a partner that helps us be more productive and enable the technology to create new income opportunities, without giving up our own professional development.

Depending on who you talk to, Artificial Intelligence and Generative Artificial Intelligence are technologies that are seen as either the saviors or the disaster bringers in our lives. Each side has its own arguments, but it is certain that AI will profoundly change the way we are used to work. After influencing the way we inform and the way we behave, AI will also change the way we look at our careers and jobs.

In early 2024, the International Monetary Fund (IMF) published an analysis which found that 40% of global jobs will be affected by Artificial Intelligence. While until now the technology has been used as a tool to automate routine tasks, it could now have an impact on highly specialized work. However, Daron Acemoglu, Institute Professor at MIT and one of the winners of the 2024 Nobel Prize in Economics, believes the situation will be different in the next decade than what IMF predicts. In an October 2024 interview with Bloomberg, Acemoglu estimates that only 5% of jobs will be replaced or heavily automated by AI in the next 10 years, because the technology is expensive, still has accuracy problems, and lacks the ability to reason or logic. This means that many highly specialized jobs won’t be able to be replaced anytime soon because there will still be a need for the human factor in the process.

AI makes us more productive

MIT FutureTech Project Research Scientist Martin Fleming says AI is an opportunity, not a threat, and could bring significant benefits to the way we work. “There is a reasonably high probability that, over the course of the next decade, Artificial Intelligence tools will contribute to improved productivity and more equal distribution of income”, Fleming says in an interview via Google Meet for Panorama.

The expert’s estimate is that there is a high probability that countries in Central and Western Europe and North America will experience increased productivity thanks to AI over the next 10 years, which will boost their GDPs. So, AI represents a positive turning point, he concludes.

A September 2024 report from the European Commission shows that Artificial Intelligence has “significant potential to improve public sector services across the EU”. The Commission estimates that sectors such as health, e-government, and education can benefit most from the integration of this technology, along with its use in transportation (autonomous vehicles are just one example).

Stijn Broecke, Senior Economist at the Organisation for Economic Co-operation and Development (OECD), agrees with the IMF data: while robots used to replace repetitive processes, AI technology will no longer replace only factory workers, on the contrary, highly skilled professions will be the most exposed. At the same time, the effects will be far-reaching and not limited to specific industries or roles.

“I think it’s a technology that will affect pretty much every single one of us. […]  I think we’re at a stage where we have discovered technologies that could do quite a lot and we are in the process of beginning to use them in the workplace, and we’re beginning to understand what they can and cannot be used for. My opinion is we’re still at the beginning of all this, I think there’s still a lot of surprises in terms of what AI will be able to do. Good and bad surprises.”

Broecke also explains that AI is more likely to improve work than replace it. Even if certain sectors such as finance face a higher risk of automation, the positive flipside is that AI opens up huge opportunities for increased productivity.

Technology may polarize the job market, but is unlikely to create mass unemployment

Eurostat data from January 2025 shows that Artificial Intelligence is mostly adopted in large companies, so far. Thus, 41.1% of large EU companies were using AI in 2024, but in terms of the overall figure, only 13.8% of EU companies used the technology last year. The analysis notes that, compared to 2023, last year’s AI adoption rate in the EU increased by 5.4%. 

In Romania, in 2023 only 1.5% of companies were using AI technology. In 2024, the percentage doubled to 3.0%, but we still remained at the bottom of the Union’s ranking.

The Harvard Business Review did a study related to the impact of AI on freelance job ads. The analysis included 1.388.711 ads from a global freelance job platform and covered July 2021-July 2023 period. The research published at the end of 2024 shows that the launch of ChatGPT (note – in November 2022) and AI image generators had immediate effects and decreased job ads on the platform by 21%. The most affected were writing-related ads, down 30.3%, followed by web and software development, down just over 20%, and the least affected were engineering ads, down just 10.4%. Although the study only looks at freelance work and does not cover the last year and a half, the figures show the potential of Artificial Intelligence to direct companies’ resources to technology, rather than human resources, where possible.

The IMF report above predicts that in developed labor markets, 6 out of 10 jobs will be impacted by Artificial Intelligence, but the effects will be positive because this will translate into higher productivity as the technology penetrates various fields. In terms of the impact on emerging markets and still-developing economies, the analysis estimates that the replacement of some human tasks by AI could lead to a decrease in the need for labor and, consequently, lower wages and higher unemployment. In other words, AI could further polarize labour markets, favouring strong economies and, thus, increase the gap between them and the developing countries, which in turn would increase economic inequality.

From this perspective, there is a distinction between developed and less developed countries. It is also the countries in North America and Western and Central Europe that typically develop AI technology and will benefit from the advantages. The problem arises for less-developed countries, which may struggle, especially if they rely on call center activities or financial accounting support, Martin Fleming also explains. The key, he believes, lies in how people will cope with change, by adapting skills and education systems that can train the competencies needed by future employees.

However, the expert says it is not a question of a massive replacement of jobs with AI technology, but a change in the very nature of work.

“As long as productivity growth exceeds job displacement, the productivity growth is going to create new income and new opportunities globally, as well as across the developed nations. The key is the value creation, the new value creation. […] The prospect of mass unemployment is a very low probability. Anything can happen, but that’s a very low probability. The issue is the quality of work, the nature of work, and the wage rates that are being earned”, Fleming details.

Wage gaps are another hot topic when it comes to the adoption of Artificial Intelligence. Stijn Broecke says a 2022 analysis by the OECD shows that for occupations exposed to AI technology there were no negative wage differentials. “We found smaller or reductions of wage inequality for the workers within that occupation. We’re only speculating at this stage, but this is very consistent with some of the evidence that we’ve seen that AI can reduce productivity differences between workers. Especially, AI can boost the productivity of the least productive workers”.

In other words, technology appears to be driving fairer pay distribution and narrowing the performance gap by providing the tools to make decisions faster, which helps employees catch up.

For now, Artificial Intelligence is only just starting to really make its presence felt within labor markets, so it’s all about scenarios and predictions at the moment, especially as the technology is evolving rapidly. “Maybe in the longer run we risk also seeing this increase in wage inequality between occupations”, Broecke reflects.

How we can mitigate the risks

Eurostat data shows that in 2023, 44% of Europeans lacked basic technical skills. This is despite the target of 80% of European adults acquiring them by 2030.

The most “digitized” Europeans are the Dutch – 83% of them have basic or advanced digital skills, followed by Finns (82%), and Irish (73%). At the bottom of the league, in the last three places, are Poland with 44.3%, Bulgaria with 35.5%, and Romania with 27.7% of the population having digital skills.

We are going through a defining decade for the technological future of labor markets, and the only trump card that can keep employees competitive in the face of AI is if they learn to use Artificial Intelligence. This will help countries cope with the risk of AI increasing economic inequality between less developed and developed countries. Stijn Broecke believes that the development of AI skills is essential, coupled with the development and use of new technologies in the field in a safe way, and clear regulations about responsibilities, what is allowed to do and what is not allowed in AI.

In addition to laws, the OECD economist says that a dialog between employers and employees is essential for a successful adoption of Artificial Intelligence, in order to handle possible concerns that employees may have about AI replacing their job.

The European Union already has regulations in place through the AI Act, a legislation that sets clear limits and rules for developers, but does not necessarily target labor markets. However, as part of the AI Act, from August 2025, a code of best practice will come into force covering the use of General-purpose AI, including models that can perform a wide range of tasks. This code will be a tool to help developers show that they are complying with regulations and including best practices in their products.

Successfully integrating Artificial Intelligence into global economies can be done by turning the technology not into a human replacement, but into an efficiency-enhancing partner, believes Martin Fleming.

“Imagine that you are a flight attendant. Flight attendants provide for the safety of flyers, they provide customer service during the flight. That interaction is unlikely to change for the foreseeable future. However, if Artificial Intelligence can be used to better schedule flights, so that there are fewer delays, fewer missed assignments, and fewer missed flights, then the quality of air travel improves. Because flight attendants know where their next assignment is, when it’s going to be, and there is a better quality of service overall, even though the personal service and the customer service that flight attendants provide doesn’t change”, the economist explains the association.

Romania and Artificial Intelligence, a complicated affair

Locally, the situation can be summarized briefly: there is still a long way to go.

Human resources expert Andra Pintican says the local job market is highly polarized and there are major differences between big cities and the demands there and smaller cities. If in cities such as Bucharest or Cluj the presence of multinational corporations has become common, so discussions about the development and adoption of Artificial Intelligence are also common, the situation is not the same when we’re referring to smaller cities or smaller organizations.

Because of the wide development gaps in the labor market, SMEs end up at a competitive disadvantage because they don’t have the same capacity for AI adoption as large corporations do, which also benefit from extensive resources, Pintican explains. “It seems to me that this is where, first and foremost, the state system should step in to support smaller companies with lower taxes. I don’t know if forcing organizations by law to do things would be an option. Here, at the system level, the octopus is so rotten that I honestly don’t see what the macro-level solutions could be”.

The Authority for the Digitalisation of Romania published last summer a National Strategy for Artificial Intelligence, which should last until 2027. It aims to streamline the work of institutions in dealing with citizens and better coordination between institutions. The strategy also includes better training of AI specialists (including in educational institutions), increasing public awareness of the benefits of the technology, developing innovation capacity, and fostering the adoption of Artificial Intelligence through regulation and standardization. 

Romania needs more profund changes, not only AI

The adoption of AI and how it can be done effectively for the Romanian employee is a discussion that, Pintican believes, is more advanced than the point at which many companies in the market are at. “Before we use Artificial Intelligence, let’s learn about human intelligence. We are human illiterates who want to get our PhD in technology. That’s exactly where the danger is. AI is a blessing, it’s a wonder, but if it falls into the hands of people who don’t understand basic human experience, what are they going to do with it?”

Andra Pintican says that due to the leadership styles that are not geared towards growth, but towards infantilizing employees, the adoption of AI in the Romanian labor market might be more about a professional “shortcut” than towards development. Because many employees are overworked and few companies emphasize creating a psychologically safe work environment, employees don’t feel comfortable saying they are burned out, so they end up using AI not as a development tool, but as a way to escape their over workload. This sometimes leads to cases where employees use AI solutions where they enter confidential data without the employers’ knowledge, Andra Pintican says.

To make steps forward, Pintican believes organizations should focus on treating employees like adults and on their emotional well-being. Then, once a healthy and balanced work environment has been created, one can talk about how to effectively adopt new technologies.

The direction the labor market is heading in the next few years is to make Artificial Intelligence an integrated part of work. If until a decade ago food coupons and laptops were seen as perks of the job, Andra Pintican says the same will happen with AI, meaning it will become a “personal assistant” and every employee will have a dedicated account for an AI service. “It’s a resource of the organization and you have to know how to use it. So that’s where I see us going. OK, there are roles that will be done exclusively by AI, we understand that, but there are also roles where AI will be the personal assistant for each of us”, she explains.

The key to successfully facing a future dominated by Artificial Intelligence is to change things at the basic stages, such as transforming the educational system from one that is leaning towards shaping professions to one that shapes people. Because more and more of today’s young people are dissatisfied with the educational system, they become detached from the learning experience, and technology becomes a form of “cheating” school assignments for them. As a result, today’s youth fails to develop basic human skills that school should help them develop. The effects, says Pintican, will not be seen on the Romanian job market now, but in the decades to come. “Just think that these kids, who are being taught to cheat, are 10-20 years from now entering a labor market that will be hyper-competitive, and they won’t even be able to cope”.

Except that it is not the Artificial Intelligence that will be their biggest competitor, as we might be tempted to think, but themselves. Young people who don’t make the effort to learn how to use their native intelligence and human skills first, before using AI technology, will have trouble finding a job in the future and will have a harder time navigating the professions they choose.

Articol editat de Raluca Ion