Noah Smith on the economics of AI

What’s kind of amazing is that with the exception of Derek [Thompson], none of these writers even tried to question the standard interpretation of the data. They just all kind of assumed that although the national employment rate was near record highs, the narrowing of the gap between college graduates and non-graduates was conclusive evidence of an AI-driven apocalypse for white-collar workers.

But when people actually started taking a hard look at the data, they found that the story didn’t hold up. Martha Gimbel, executive director of The Budget Lab, pointed out what should have been obvious from Derek Thompson’s own graph — i.e., that most of the “new-graduate gap” appeared before the invention of generative AI. In fact, since ChatGPT came out in 2022, the new-graduate gap has been lower than at its peak in 2021!

In fact, the “new-graduate gap” is extremely cherry-picked. Unemployment gaps between bachelor’s degree holders and high school graduates for both ages 20-24 and ages 25+ look like they haven’t changed much in decades…

Overall, the preponderance of evidence seems to be very strongly against the notion that AI is killing jobs for new college graduates, or for tech workers, or for…well, anyone, really.

Here is the full post.