Simon Johnson warns AI threatens jobs and calls for dramatic action

The Nobel Prize winning economist Simon Johnson has warned that artificial intelligence poses a serious threat to jobs and called for dramatic policy action to manage the transition. Speaking to Newsnight, Johnson, who chairs the new AI Economics Institute and advises the UK government, said that while Britain can take advantage of AI, it will require significant effort and preparation.

Johnson described AI as an automation technology that replaces people with machines or algorithms, but also creates new tasks and activities. The key question, he said, is the balance between jobs lost and jobs created, and whether people can be retrained to move into new opportunities. He noted that previous industrial transformations had been difficult, but this one is likely to be more intense and quicker.

He was critical of the United States, saying it is pursuing AI aggressively without much care for the impact on jobs. "I think a lot of people are going to get sideswiped by that," he said. But he argued that other governments, including the UK, can make different choices. By developing and deploying AI in a way that generates demand for skilled workers and for those without university degrees, wages could rise and outcomes improve for everyone.

Asked for advice to young people choosing careers, Johnson said they should think carefully about what AI can do now and in the future. He suggested that working with AI, using it to enhance productivity, is the right frame of mind. He acknowledged that knowledge workers will face pressure, but said companies are exaggerating the technology's immediate power to impress investors. "We do have some time," he said, "if we act now to prepare and to build a stronger, more resilient economy."

Johnson identified clerical workers and less educated white-collar workers as the most likely to struggle. He said retraining them to be productive with AI is an important priority for the government. He revealed that his conversations with the new prime minister and chancellor suggest they are realistic about AI, wanting to get ahead of it and use it to improve public services, education, and healthcare. He also saw opportunities for the UK to sell AI products and services to Europe and even back to the United States, particularly in areas like healthcare where the US performs poorly.

On climate change, Johnson said the energy demands of AI and data centres are a serious consideration. He noted that tech companies had talked more about net zero before Donald Trump's re-election, and that they are now "blowing with the political wind" in the US. He suggested that as the US vacates the field, other countries could invest in energy and AI and create good jobs.

Johnson stressed that the goal of his work is to prevent a political backlash against AI. He drew on history, noting that technological change has always been difficult for some but has also created new opportunities. "When productivity rises, the economic pie is bigger, and you can share that in an equitable way," he said. But he warned that this technology is coming quickly and differently because of its focus on knowledge workers, requiring action that is "by historic standards, fairly dramatic." He concluded that everyone is in the line of fire, but that ignoring the technology would leave countries falling behind.