Draft

“AI exposed jobs may increase hiring and attract higher wages. It all depends on a) elasticity of consumer demand and b) number of AI exposed tasks in a job.” This is a key point. We’re going to see lots of AI automation emerge that has the opposite effect that we expect, because the cost of doing something goes down and greater demand for that service exists at lower prices. Take a *very* simplistic example in agentic coding to see what happens when you can dramatically increase output per $ of engineering budget. Before AI, a mid-sized company or team within a large company has a project they want to build software for. It takes 50 engineers to fully resource the effort, but the project doesn’t provide the ROI to fund it compared to other initiatives. Or the company knows its expertise isn’t in building software so it’s not even worth starting. So they hire 0 engineers, and don’t start the project. Now, AI agents make it possible for this to be a 10 engineer problem. All of a sudden the ROI calculus immediately changes on starting up the project. So now instead of hiring 0 engineers to do the project, the company hires 10 with AI agents. This has endless implications in coding, in particular, because coding can now have impact for anything from doing internal workflow automation, systems integration, data analysis, as well as customer-facing product innovation. By bringing down the cost of writing code, we can just begin to use it for far more. This will likely play out in a number of other job families as well, where lowered costs or higher output will lead to more demand. Now, not all of this will be smooth. For instance, there may need to be some reallocation of talent across the economy to move from some places of excess supply to places of lower supply. This could be bumpy at times, but the dynamic holds.