Marcia Hultman

Cabinet Secretary

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South Dakota e-Labor Bulletin

November 2023

Artificial Intelligence


We hear about it all the time lately. But what is it? And how will it impact the labor market?


According to the Merriam-Webster dictionary, it is “a branch of computer science dealing with the simulation of intelligent behavior in computers.” The secondary meaning is “the capability of a machine to imitate intelligent human behavior.”

According to the Britannica encyclopedia “artificial intelligence (AI) is the ability of a machine to perform tasks thought to require human intelligence. Typical applications include game playing, language translation, expert systems, and robotics. Britannica goes on to say, “Although pseudo-intelligent machinery dates back to antiquity, the first glimmering of true intelligence awaited the development of digital computers in the 1940s. AI, or at least the semblance of intelligence, has developed in parallel with computer processing power, which appears to be the main limiting factor. Early AI projects, such as playing chess and solving mathematical problems, are now seen as trivial compared to visual pattern recognition, complex decision-making, and the use of natural language.

When searching online for definitions of artificial intelligence, one Google result referenced IBM’s website. Here we found a brief article entitled, What is artificial intelligence? This article defines artificial intelligence as leveraging computers and machines to mimic the problem-solving and decision-making capabilities of the human mind.

The article goes on to discuss the birth of AI. According to this article Alan Turing, who is often referred to as the “father of computer science,” published a paper entitled “Computing Machinery and Intelligence” in 1950 in which he posed the following question, “Can Machines think?” From there he offered a test (which has since become known as the Turing Test), where a human interrogator would try to distinguish between a computer and human text response.

Next, this article cited a textbook entitled Artificial Intelligence; A Modern Approach written by Stuart Russell and Peter Norvig. In it, they delve into four potential goals or definitions of AI, which differentiate between rationality and thinking versus acting. They divided these four definitions into two approaches.

The Human Approach:

  • Systems that think like humans
  • Systems that act like humans

and the Ideal Approach:

  • Systems that think rationally
  • Systems that act rationally.

The article goes on to describe AI as a field, which combines computer science and robust datasets, to enable problem-solving. Russell and Norvig go on to say through AI, algorithms create expert systems that make predictions or classifications based on inputted data.

The article concludes by pointing out AI has gone through many cycles throughout the years but the release of OpenAI’s ChatGPT marked a turning point. It points out the last time generative AI loomed this large was the breakthrough in computer vision, but now the leap forward includes natural language processing. And it’s not just language: Generative models can also learn the grammar of software code, molecules, natural images, and a variety of other data types.

The IBM article also points out AI technology is growing every day, and its capabilities are just starting to be explored. But it also cautions as the hype around AI takes off, conversations around ethics become critically important.

What does the U.S. Bureau of Labor Statistics think about AI and the impact it could have on the labor market?

The U.S. Bureau of Labor Statistics (BLS) is a federal partner of the South Dakota Labor Market Information Center (LMIC). BLS is one branch of the U.S. Department of Labor, and it is the principal federal statistical agency responsible for measuring labor market activity, working conditions, and price changes in the economy. Its mission is to collect, analyze, and disseminate essential economic information to support public and private decision-making. As such, it is always interesting to see what BLS is predicting with regard to new and emerging labor market trends and how changes in technology, will impact national and global labor markets. It is certain global and national trends have a trickle-down effect, which ultimately impacts both state and local labor markets.

According to a congressional report BLS released, Assessing the Impact of New Technologies On the Labor Market, private and public decisions related to labor markets and working conditions are increasingly being influenced by technological considerations. Spurred by a wave of technological developments related to digitization, AI, and automation, governments around the world have declared the creation and deployment of these technologies present both important opportunities and significant challenges. Therefore, what happens at the macro level globally and nationwide will impact the more micro-state, county, and city levels.

Technology is at the heart of both macroeconomic and microeconomic analysis. In the past, technology has been what makes labor more productive and therefore has resulted in higher average wages and increased purchasing power. Indeed, technology has become synonymous with macroeconomic growth models which emphasize labor and capital as key factors of production which generate economic value. Basic macroeconomic accounting subtracts the value of these measurable factors (the cost of labor and capital) from Gross Domestic Product (GDP) and describes the residual as productivity growth. Productivity growth is the long-term driver of higher living standards. In the past, as technology has increased, so has economic growth and thus labor market prosperity.

Since technology is so closely related to productivity, when looking at how AI may impact the future labor market, most economists tend to look at how past emerging technological trends have impacted productivity growth trends. In the 18th and 19th centuries, technologies associated with the Industrial Revolution dramatically reduced the costs of producing food, clothing, and other goods. Not to mention what the advent of such technologies as radio, film, television, planes, and automobiles have done to lower the costs of communication and transportation. In fact, many economists cite 1870 to 1970 as the first and second industrial revolutions--times of significant and tremendous change for mankind.

The inventions occurring during this time period truly improved life as we know it. No longer were people living hand-to-mouth but rather, most started to live paycheck-to-paycheck. Life became easier and therefore we became more prosperous. A single farmer could produce more food than hundreds, perhaps thousands, of farmers could have dreamt of producing before the industrial revolution. One factory could produce record amounts of goods. These things, coupled with the ease of transportation and communication, led to a demand for goods and services our ancestors never would have dreamt possible. Then, quietly at first, the computer revolution began to unfold. As early as the late 40s and 50s man began to look to the third revolution, computers. And, to this point in time, the computer revolution has made history as an evolving technology changing and improving life like few other inventions had. Some economists and analysts cite AI as the fourth leg of the industrial revolution. And as was true in each of the past revolutions, the AI revolution has its fair share of nay-sayers predicting gloom and doom for humanity as we know it.

But will it really have the tremendous impact the Industrial Revolution had on the labor force of the future? Some say yes, while others cite these emerging technologies as just another tool in the technology arsenal of the 21st century and beyond. They see it as not too different than other computer advancements experienced to this point.

Perhaps though, AI will be different. A computer that can reason is certainly different than what we use now. First, it was automation; think of the calculator or a vending machine. Next came digital technology. Digitization refers to the translation of information into a form that can be understood by computer software and transmitted via the internet. Digital technologies most certainly have impacted business operations and the economy. Many services once performed by humans, like trading of financial assets, banking, accounting, and processing orders for food and retail goods are examples. Creating and confirming reservations are now routinely handled by software as a result of digitization. These are just a few of thousands of ways digitization has changed the way we do business and caused churning in the labor force. We still need bank tellers but fewer of them. We still need fast food counter attendants, but not as many. The digitization of computers has helped fill a gap in the labor force employers are unable to fill with workers.

But when does filling a gap become replacing workers? In the past, technology has done just that: filled gaps and made life easier in general. It is easier to run a tractor than to manhandle a team of horses. It is easier to operate a press to bend and form metal rather than heating it, and then forming it by hand.

It is easier to do banking 24-7-365 from the comfort of your couch than to take time to run to the bank to cash a birthday check Grandma sent. Heck, even Grandma would rather send an electronic gift card to your favorite cyber store than run around buying a gift card, getting a birthday card, writing a note in the card, and then driving to the post office to mail it.

Let’s face it, digitization has dramatically impacted not only how we do business, but how we live. And all of these changes have created shifts in the labor market. Most have been rather slow and evolved over time. Still, over time changes have occurred and smugly, unless you were one of the workers dislocated or replaced by technology, you probably thought nothing of it.

Convenience has become king in the digital world. Why walk to tell someone something when you can call? Why talk when you could type? Why type when you can point or swipe? But what if computers can be taught to reason and rationalize? What if a computer can perform cognitive tasks--the jobs and tasks only humans perform? We may use computers and other digitized machinery to perform these tasks, but we are the ones who initiate the tasks, perform them, and see them to the final outcome. What if a computer can be taught to do things like drive a truck, argue a legal case, write a novel, write and perform music, diagnose and prescribe medication to treat illnesses, and council a human? Until now, those things were performed by humans. But with the advent of AI, these things may be initiated and performed by artificial intelligence, by AI bots, and even robots. Things that seemed farfetched or things only our children or their children would live to see are happening now. We are the ones seeing them and ushering them into our daily business and personal lives. Things of the future are happening NOW, right now!

ChatGPT3 hit the world in November 2022, and someday became sooner than most people thought. Even, or maybe especially, those in the forefront of the AI world became apprehensive, posing the question, “What will an AI future look like? Will computers take over jobs, and not just low-paying or undesirable jobs, but good-paying jobs in high demand and heavily sought? What about jobs only the highly educated, highly skilled workers among us have the skills necessary to perform? Some economists predict 40-45% of the jobs currently performed by humans could be replaced by AI robotics. Some economists predict higher. Could these predictions be true? Could AI bots really replace or displace that many jobs currently held by humans? What happens then? Where are we headed?

In next month’s Labor Bulletin article, we will continue examining AI’s potential impacts on the labor market, delving into the impact on occupations. We’ll consider what jobs are most likely to see worker displacement because of this technology, as well as the new and emerging jobs AI will likely create.