As with other general-purpose technologies, the long-run effects of AI are likely to be profoundly positive. But in the short term, AI may deeply disrupt labor markets and harm some workers.
Source
Speech by Governor Barr on artificial intelligence and the labor marketOriginal Quote
As with other general-purpose technologies, the long-run effects of AI are likely to be profoundly positive. But in the short term, AI may deeply disrupt labor markets and harm some workers.
Outlook
OptimisticThe long-run effects are characterized as profoundly positive for productivity and living standards, though short-term disruption is also predicted.
'Long-run' and 'short term' are used without specific dates; long-run effects of general-purpose technologies typically play out over decades, inferred as beyond 5 years.
'May' indicates possibility rather than certainty for the short-term disruption component.
Potential Data Sources for Validation
Long-run: Track aggregate productivity growth (BLS TFP data), real wage growth, and GDP per capita over a decade or more following widespread AI adoption. Short-run: Monitor unemployment rates, labor force participation, and earnings data segmented by AI-exposed occupations.
About the Author
Michael S. Barr is a Governor of the Federal Reserve Board of Governors — and former Vice Chair for Supervision (2022–2025) — who is also a professor of law and public policy at the University of Michigan on leave, and previously served as Assistant Secretary of the Treasury for Financial Institutions under President Obama and as a key architect of the Dodd–Frank Act.
Across 18 tracked claims, Michael S. Barr skews neutral.