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AI may be one reason some wages are sinking

LinkedIn co-founder on AI

Artificial intelligence can mean everything from personal digital assistants like Amazon's (AMZN) Echo to the program that checks you into a doctor's office, or even a nail salon, before you speak to a human. These features are becoming increasingly ubiquitous in U.S. cities as offices automate many functions. A recent report from consultant McKinsey & Co. predicted about half of all current work activities can be adapted and automated, today.

Now, a new report of 10 major U.S. metropolitan areas from job search site Glassdoor showed the shift is underway as wages slip for jobs where "automation and AI are taking hold."

The survey, released monthly, found pay for loan officers fell 6.1 percent in December compared with a year earlier, while office manager pay sank 1.1 percent and machine operators lost 1.9 percent as automation takes root even more widely in manufacturing.

"In our pay data, when we look at jobs that are seeing weak pay growth, and sometimes the negative pay growth, it's clear that some of those professions have a weak labor market because some of those jobs are being done now by software," Glassdoor Chief Economist Andrew Chamberlain said in an interview.

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It's not so much that all of one job is being replaced, it's that portions of some traditional jobs are being automated, Chamberlain said. Electronic tablet check-in at all kinds of offices, for example, is replacing one function of the administrative assistant. More people now can apply for loans online, going through the bulk of the process before ever actually speaking to a human. 

"So far we really haven't seen large-scale displacement of people actually becoming fully unemployed because their job has been fully replaced by artificial intelligence," Chamberlain noted.

It's that the jobs themselves are changing: New supervisory skills are needed to oversee humans and the software-driven tasks that now do some portion of their work, and workers who have those skills are in demand. A recent Gartner report predicted AI will create more jobs than it eliminates by 2020 and generate 2 million new net jobs in 2025. 

But for now, the transition may be cutting into wages as job descriptions and skills needed to do those jobs change.

As many as one-third of U.S. workers may need to learn new skills and find new occupations by 2030, the McKinsey report estimated. Transitional remedies will be needed, and the authors cite measures being explored globally, such as basic universal income and extensive job training. 

"Our analysis shows that most job growth in the U.S. and other advanced economies will be in occupations currently at the high end of the wage distribution," the McKinsey report said. "Some occupations that are currently low wage, such as nursing assistants and teaching assistants, will also increase, while a wide range of middle-income occupations will have the largest employment declines."

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Very few jobs list AI or "deep learning" in their title, Glassdoor's Chamberlain said. The job site had 512 unique AI and "deep learning" jobs open in the U.S. -- out of about 6 million listed as of Oct. 20.

Nationally, median base pay in December rose 1.1 percent, according to the Glassdoor survey.

Of 84 job titles, those growing faster than average included medical technologist, restaurant cook and paralegals. Jobs with declining wages were led by bartenders, loan officers and Java software developers.

The Glassdoor report includes details on wages and job groups in 10 major metropolitan areas: AtlantaBostonChicagoHoustonLos AngelesNew YorkPhiladelphiaSan FranciscoSeattle and Washington, D.C.

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