Jerome Powell tells Gen Z: Don’t fear AI, master it

(SeaPRwire) –   Last week, Federal Reserve Chair Jerome Powell offered a clear directive to the upcoming workforce: cease fretting over artificial intelligence and begin mastering its application.

During a broad discussion moderated by Professor David Moss with nearly 400 Harvard economics students, Powell recognized that Gen Z faces one of the toughest employment landscapes in recent times, noting that AI serves as both a source of difficulty and a remedy.

Moss immediately challenged Powell, representing the students present: “They are stepping into an uncertain era—an economy where job creation is sluggish for various reasons. Specifically, positions that were abundant for recent college graduates just two years ago have become scarce. Furthermore, AI represents a significant technological shift that holds both promise and existential risks.”

Powell stated that he and his central bank counterparts are “fully cognizant of what students are facing right now. It is a period of very slow job growth. Additionally, you have the rise of AI.” Acknowledging that a “more long-term, secular” trend is likely unfolding regarding technology and AI, he was frank: “It is undeniable that entering the workforce is difficult at this moment.”

Powell also referenced changes in immigration policy, as well as the disruptive impact of emerging technologies. However, instead of advising caution, he directed students toward the very tools upending their future professions: “I believe you are in a position where you must dedicate time to truly mastering these new technologies, which will benefit you greatly.”

Drawing from personal experience, Powell remarked, “I have observed that these large language models significantly boost human productivity.” He continued, “I feel it enhances my own efficiency, as I can absorb information rapidly.” He noted that discussions with his son and other professionals had confirmed this perspective: for individuals who adeptly utilize AI, it acts as a force multiplier rather than a danger.

The trend of AI-washing has arrived

These comments were made during a sensitive period. Although the U.S. unemployment rate stays low, Powell admitted that this statistic provides little solace to recent graduates fighting to secure their initial roles. He observed that entry-level positions, once common a few years ago, have become rare as businesses determine which tasks can be automated.

Powell virtually confirmed that numerous major corporations are keen to emulate Block CEO Jack Dorsey by cutting thousands of jobs, a tactic labeled “AI washing” by figures like OpenAI CEO Sam Altman. He stated that “leading U.S. companies—and we have spoken with many of their executives—are all evaluating their options” regarding workforce reductions. “The reality is, they can eliminate many positions that are automatable by a sophisticated large language model. They simply can, and they will, because their rivals are doing so, and they cannot bear the burden of higher costs than their competition.”

Nevertheless, Powell resisted a fatalistic outlook. He pointed to the historical cycle of technological disruption—dating back to the creation of the loom—as proof that new tools, despite their short-term threats, eventually enhance productivity and standards of living.

Jerome Powell discusses the Luddite era

Powell briefly adopted his economist persona, referencing comparable technological leaps throughout modern capitalist history. “If you review history—broadly speaking, this trend has persisted for a couple of centuries, since the invention of the loom, which displaced countless weavers. Yet, in every instance, it has ultimately increased productivity and improved living standards—provided society continues to generate individuals with the skills and aptitudes to leverage that technology.”

Powell forecasted “that this will also be true” for AI, viewing it as merely a modern iteration of the loom. “It might require some patience and perseverance,” he noted. “But over the long run, this economy will present you with tremendous opportunities. So, try to remain somewhat optimistic about that.”

The critical issue, however, is the duration of that long term. After all, when mechanical weaving replaced textile workers in 19th-century England, the shift was harsh, igniting the Luddite movement where displaced laborers destroyed the machinery that stole their livelihoods. What if the “long term” encompasses the entire lifespan of the Gen Z cohort?

This prompted Moss’s subsequent inquiry: Does long term imply 10, 20, or even 40 years? “You know,” Powell replied, “it is incredibly difficult to predict.” He observed that the AI integration occurring in the 2020s is primarily targeting current middle management and back-office roles. Powell surmised that individuals proficient in AI should remain insulated from these changes, though he conceded he lacked a definitive answer. “There may be a period of difficulty,” he told the professor, “and this might be one of them. However, I would simply say that the technology is here, and it is here to be utilized. And I remain, for the medium and long term, very optimistic about this economy relative to any other.”