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Transformation in the U.S. Labour Market Artificial Intelligence and Occupational Polarization in the 21st Century

Author

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  • Ananiades, Eduardo
  • Antunes, Daví

Abstract

The improvements in artificial intelligence (AI) and data processing technologies have renewed the question posed by John M. Keynes in Economic Possibilities for Our Grandchildren. Particularly regarding the expectation of human emancipation from material survival as a result of technological progress, the possibility of seeking purpose and fulfillment is revived. However, new technologies have driven the economy towards an ontological reduction that subordinates the human being to abstract economic relations, reducing labor and work to exchange-value. Hence, labour ceases to be a process aimed at satisfying concrete needs and becomes, instead, an economic function restricted to the market and production. This paper is organized into two primary sections. The first provides a diagnosis of the U.S. labor market, which is characterized by an increasing polarization between high- and low-skill occupations, alongside a narrow labour structure of typical middle-class jobs. The segmentation of the labor market takes shape as the manufacturing sector loses its centrality and the service sector becomes more significant to the U.S. economy. This dynamic unfolds as financial deregulation and neoliberal policies shift economic structures toward speculative wealth accumulation, diminishing industrial job opportunities and polarizing the labor market into highly skilled, well-paid roles and precarious, low-skilled positions. The second section examines how AI technologies have transformed the tasks performed by certain jobs and the hierarchical and economic interaction within firms, altering the qualification requirements, especially for corporate-level jobs. The competition for high- and low-skill occupations intensifies. In the first case, the demand for constant updating of technical competencies and knowledge to complement AI systems increases. For low-skill occupations, fierce competition takes place due to the simplification of tasks, allowing less-skilled workers to perform the same functions. Therefore, the integration of AI into the labor market exacerbates wage disparities and affects opportunities both across and within different segments of the working class, increasing the demand for highly skilled workers while simultaneously reducing opportunities for those in low-skilled positions.

Suggested Citation

  • Ananiades, Eduardo & Antunes, Daví, 2025. "Transformation in the U.S. Labour Market Artificial Intelligence and Occupational Polarization in the 21st Century," MPRA Paper 125898, University Library of Munich, Germany, revised 2025.
  • Handle: RePEc:pra:mprapa:125898
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    References listed on IDEAS

    as
    1. Nardy Antunes, Davi José & Tunes Mazon, Marilia & Cardoso de Mello, João Manuel, 2023. "The Economic Possibilities of Technological Progress: Business Restructuring and the Labor Market in the 21st Century," MPRA Paper 120397, University Library of Munich, Germany.
    2. Stephen Hansen & Tejas Ramdas & Raffaella Sadun & Joe Fuller, 2021. "The Demand for Executive Skills," NBER Working Papers 28959, National Bureau of Economic Research, Inc.
    3. Tyna Eloundou & Sam Manning & Pamela Mishkin & Daniel Rock, 2023. "GPTs are GPTs: An Early Look at the Labor Market Impact Potential of Large Language Models," Papers 2303.10130, arXiv.org, revised Aug 2023.
    4. Youngsoon Kwon & Myungkyu Shim & Hee-Seung Yang, 2024. "Effects of Initial Labor Market Conditions on Job Polarization: Evidence from South Korea," Korean Economic Review, Korean Economic Association, vol. 40, pages 219-253.
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    Keywords

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    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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