Moody's Talks - Inside Economics The Geography of GenAI
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May 9, 2025 In this discussion, Scott Abrahams, a professor of economics at LSU, and Frank Levy, a strategy expert at Duke, tackle the complex impact of generative AI on labor markets and urban economies. They ponder whether AI will enhance or threaten job security and how it affects the value of college degrees. The duo reveals intriguing shifts in migration patterns, highlighting which cities might thrive, like Savannah, and which, including San Francisco, might face challenges. Their insights offer a glimpse into the future of work amid technological transformation.
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Manufacturing Shock's Societal Impact
- The manufacturing shock led to increased education, migration, and political realignment in the US.
- These adjustments explain significant societal shifts following manufacturing job losses.
AI Shock Similar to Manufacturing
- AI threatens about 3-4% of jobs, similar in scale to the manufacturing shock.
- Yet AI impacts white-collar jobs broadly spread across metro areas, unlike manufacturing's localized effect.
AI's Dual Impact on Workers
- AI will create a divide between workers helped by AI and those replaced by it.
- This may widen wage gaps similarly to how manufacturing shifted wages between education levels.