‘There are winners, there are losers’: WA economist puts AI’s workplace impact in the context of earlier technology shifts

Artificial intelligence is starting to show up in Washington’s job numbers. Washington’s unemployment rate fell to 4.8% in September. It was the third straight monthly decline, down from 5.2% earlier in the year, according to the Employment Security Department (ESD). The state still lost an estimated 15,400 jobs that month.

The state’s chief labor economist, Anneliese Vance-Sherman, joined “The Gee and Ursula Show” on KIRO Newsradio and said it’s still too early to see the whole picture.

Vance-Sherman said the falling rate partly reflected a smaller labor force, and co-host Gee Scott summed up her outlook with an analogy.

“It sounds like you’re basically saying the state of Washington isn’t going nowhere. However, it’s almost like it’s going through a remodel,” Gee concluded.

“I think that’s a great analogy,” Vance-Sherman said.

‘AI is starting to show up’

When asked how AI is changing the workplace, Vance-Sherman said the impact is hard to measure. One trend stood out to her: unemployment in the Seattle area has been running about the same as the statewide rate.

“The unemployment rate in Seattle tends to be much lower, and I do think that AI is starting to show up in those numbers,” Vance-Sherman hypothesized.

The slowdown has hit hardest in the information and professional business services sectors. Those sectors hold much of the region’s tech workforce and are concentrated in the Seattle area. Overall job growth has been mostly flat.

“In the short run at least, the same skill sets that are creating it are the same skill sets that are likely to be impacted right away,” Vance-Sherman said. “That’s a little bit of a change from how technology often plays out.”

Is WA more vulnerable?

Gee asked whether Washington is more exposed to layoffs because Amazon and Microsoft are based here. Amazon cut about 14,000 corporate jobs last fall as it ramped up spending on AI.

Vance-Sherman acknowledged the state does have a high concentration of tech jobs likely to be affected by AI, but added the information sector is actually doing worse nationally than it is here. She added that the same industries cutting jobs are also driving strong economic output in Washington.

“We are seeing declines that are concentrated in the Seattle area, but we’re also seeing a fairly good GDP coming out of Washington compared to the nation as a whole,” she countered. “That’s really been supported by the same sectors that we’re talking about when we see these layoffs.” Vance-Sherman acknowledged some jobs will disappear and new ones will appear. “We’ve seen a lot of different shifts in technology. The nature of work has absolutely changed, and we have seen those winners and losers.”

Advice for mid-career workers: Look at other industries

Co-host Ursula Reutin asked what Vance-Sherman would tell workers in their 40s and 50s whose fields are being disrupted. She said to start by taking stock of the skills they already have.

“It is a difficult situation when we’re seeing a lot of workers that never imagined having to be laid off, because we’ve always seen this sector as a growth sector,” Vance-Sherman clarified.

Tech skills can transfer to health care and manufacturing.

“Thinking about ways that the skill set could show up in different industries, I think that’s going to be part of a good strategy,” she said.

Advice for parents of college-bound kids

When Ursula asked what parents should tell kids heading to college, Vance-Sherman said she was dealing with the same question at home.

She pointed to health care as one of the state’s steadiest sectors. Registered nurses remain among the most in-demand jobs. She once joked that health care was recession-proof. The pandemic proved it wasn’t entirely, but the sector was among the first to bounce back.

She added that as AI takes on more work, uniquely human skills will matter more.

“Thinking about communication and being able to really work with different groups and bring in different perspectives,” Vance-Sherman said. “I think communication is going to be key for a lot of young people starting their new careers.”

A commitment to lifelong learning

Gee asked whether we can look to the past to prepare ourselves for what’s around the corner. Vance-Sherman recalled starting college in the 1990s, when email was brand new. She pointed to other culture shifts in the workplace, like the widespread adoption of computers and working from home during the pandemic.

“AI is going to be a little bit different, but the overall themes tend to be similar,” she said. “There are winners, there are losers, but overall, there are a lot of qualitative changes that take place.”

Vance-Sherman wouldn’t name a specific skill that would be protected for workers over the next five years.

“I’m not inclined to specifically tag onto a specific skill set, except curiosity and a commitment to lifelong learning,” she said. “I think it’s important to keep curious, keep engaged, and let that curiosity drive what you learn next.”

Ursula concluded the state’s outlook wasn’t bleak, but workers need to adapt. She pointed out some trades are fairly insulated, highlighting a big plumbing project in her front yard.

“I know those guys are not worried about AI,” Ursula said.

Listen to Gee and Ursula on “The Gee and Ursula Show” weekday mornings from 9 a.m. to 12 p.m. on KIRO Newsradio.