Morgan Stanley has some good news if you're an office worker who lives in fear of an AI-fueled jobs wipeout.
The Wall Street Bank said on Friday that the most exposed demographic to AI disruption stands to benefit the most. As widespread AI-driven layoff announcements have dominated news cycles, white-collar workers across industries have wondered if their jobs are next to be automated away.
But according to Morgan Stanley economist Heather Berger, it's these workers who stand to win from the ways in which AI will reshape labor.
"High-income, college-educated, urban households are most exposed to AI displacement but also to potential AI gains: productivity-driven wage growth, job creation, wealth effects, and disinflation," she wrote. "We think these upside channels are underappreciated."
Berger's team uses the acronym CHIC— college-educated, high-income, city-dwelling. This group, by Morgan Stanley's assessment, is most likely to be impacted by AI as a job-market disrupting force as it continues to evolve.
The economists noted that younger CHIC workers are more likely to see parts of their jobs replaced by AI, particularly routine, entry-level tasks. But older colleagues could end up seeing wage growth due to productivity gains that AI is expected to deliver without fully replacing them.
"In terms of job creation, it is still early, but new AI-related occupations have so far been aimed at these same CHIC consumers," Berger added. "AI-related job postings have been targeted towards higher-income consumers with some experience in similar 'highly-exposed' industries."
The bank's prediction comes as AI fears are on the rise in the job market and beyond, as ominous statements from AI industry insiders and doomsday scenarios have gone viral. But Berger's team maintains that AI job fears may be overblown, and she isn't the only one.
Andrew Slimmon, head of applied equity advisors at Morgan Stanley Investment Management, told Business Insider earlier this year that he wasn't worried about the impact AI would have on employment. He predicted that the market would rebound and become stronger, similar to how the dot-com boom of the early 2000s reshaped the labor force.
Now Berger and her team see a similar scenario taking shape as the evolution of AI transforms the economy in a way that benefits CHIC households, helps create more wealth, and ultimately fuels more consumer spending.
"Overall, CHIC households are more exposed to labor displacement, but also more exposed to productivity-driven wage growth, new job creation, wealth effects, and longer-term disinflation," Berger noted.
