Big Technology Podcast Summary Episode: Is AI Really Taking Our Jobs? — With Noah Smith
Host: Alex Kantrowitz
Release Date: July 2, 2025

Introduction

In this insightful episode of the Big Technology Podcast, host Alex Kantrowitz engages with renowned economics writer Noah Smith to dissect the pervasive question: Is AI really taking our jobs? Beyond this central theme, they delve into broader economic and political landscapes, including AI productivity, immigration, wage inequality, the US-China relationship, and the state of American politics.

AI's Impact on Productivity

[01:14] Noah Smith emphasizes the nascent stage of AI's influence on productivity:

"AI as we know it has only been around for a couple years... we've had decent productivity growth and it's all been in services."

Smith notes that while AI technologies like generative AI and large language models (LLMs) are burgeoning, their concrete impact on productivity remains ambiguous. Unlike past technological advancements that significantly reshaped industries, AI integration into businesses hasn't yet translated into measurable productivity gains on a large scale.

The Generative AI Paradox

Alex introduces the concept of the Generative AI Paradox with reference to a McKinsey report:

"Nearly 8 in 10 companies have deployed generative AI in some form, but roughly the same percentage report no material impact on earnings."

[03:11] Noah Smith compares AI's current trajectory to the historical integration of electricity into factories, highlighting the importance of organizational restructuring to harness AI's full potential:

"...we need to reorganize the way production works to fully leverage AI, similar to how factories adapted to electricity."

Smith argues that, much like the initial struggles with electrification, the true productivity benefits of AI will materialize once businesses fundamentally rethink and restructure their operations to incorporate AI more effectively.

The Future of AI and Employment

Discussing the fears surrounding AI's ability to eliminate jobs, particularly entry-level white-collar positions, [07:00] Noah Smith provides a nuanced perspective:

"We don't have enough evidence to conclude one way or another what's going on there."

Smith critiques the doom-and-gloom predictions, asserting that historical precedents show technology often creates new roles even as it automates others. He likens current AI fears to past technological anxieties, suggesting that while AI may disrupt certain job segments, it is unlikely to cause mass unemployment without the emergence of new opportunities.

Wage Inequality and Economic Insights

Alex challenges the narrative of a "hollowed-out middle class" by referencing declining wage inequality and rising wages for the working class:

"From 2013 to now, working-class wages have been going up, and inequality has been decreasing."

[23:32] Noah Smith attributes this positive trend to increased productivity driven by new technologies and expanding markets:

"New technologies and new markets added to our productivity and allowed us to do more stuff. And then humans were compensated for that by getting paid more."

He contends that despite ongoing debates about inequality, the data suggests improvements for the working class, contradicting the notion that technology solely exacerbates economic disparities.

Social Media and Political Unrest

Transitioning to societal dynamics, Noah explores the root causes of apparent unrest despite economic improvements:

"Americans were able to segregate ideologically and geographically, but social media threw everyone into one room, increasing conflict across all levels of society."

He posits that social media platforms amplify exposure to conflicting viewpoints and animosities, eroding previously manageable societal divisions and fostering a climate of constant disagreement and unrest.

Racial Dynamics in Politics

Addressing recent political developments, Noah analyzes voting patterns in the New York City primary where [29:49] minority groups voted differently than expected:

"White people are more likely to have college degrees and lefty ideas... whereas minority groups may register as Democrats due to perceptions about Republican stances."

He suggests that educational polarization and the complexities of racial identity within political affiliations influence voting behaviors, challenging simplistic interpretations of political support bases.

Tariffs and Immigration Policies

Tariffs:
Alex brings attention to the fluctuating stance on tariffs, noting market volatility:

"The S&P 500 is up nearly 4% on the year... after being down 15% on April 8th."

[44:15] Noah Smith explains that financial markets anticipate a resolution or permanent pause on tariffs, mitigating fears of prolonged economic disruption. However, he cautions that ongoing tariff policies may still introduce uncertainties and sector-specific challenges.

Immigration:
Shifting to immigration, Noah assesses the Trump-era crackdown:

"The net impact... will be fairly, economically negative, but not huge."

He underscores the dual role of immigrants as both suppliers and consumers in the economy, arguing that restricting immigration disrupts labor markets without significantly altering wage structures. Moreover, Smith highlights the critical role of high-skilled immigrants in driving innovation and long-term productivity growth.

Alex probes deeper into the potential impacts on the AI sector:

"Talent working on AI today is people coming from overseas... what if the best and brightest aren't coming here?"

[42:52] Noah Smith concurs, emphasizing that limiting skilled immigration could stifle innovation and reduce the clustering effects that foster technological advancements:

"We're really playing with fire if we start kicking out the smart people."

US-China Relations and Military Build-Up

In discussing the adversarial US-China relationship, Noah presents a stark view of China's military expansion:

"China is building 100 nuclear weapons a year... the most impressive military buildup the world has ever seen."

He warns of the potential for conflict, particularly over regions like Taiwan, and stresses the necessity of strong deterrence strategies through alliances and military preparedness:

"We need to build up our own army and get the armies of our allies."

Smith draws parallels with historical military strategies, advocating for robust alliances and capable defense systems to counterbalance China's growing military prowess.

AI and US-China Competition

Bridging AI and international relations, Noah acknowledges AI's strategic importance in military and economic arenas:

"We need good military technology... AI is very important."

He differentiates between the utility of various AI applications, questioning the military relevance of LLMs while affirming the critical role of AI in areas like computer vision and autonomous systems. Smith underscores the necessity for the US to stay at the forefront of AI development to maintain its competitive edge globally.

Conclusion

The episode culminates with a comprehensive exploration of AI's role in the modern economy, the interplay between technological advancements and labor markets, and the escalating geopolitical tensions between the US and China. Noah Smith provides a grounded perspective, advocating for strategic adaptations in policy and organizational structures to harness AI's potential while mitigating its challenges. The discussion reaffirms the complexity of AI's impact on society and underscores the importance of informed, proactive approaches to navigate the evolving technological and political landscapes.

For more insights from Noah Smith, visit his NoOpinion Blog and tune into his podcast, Econ102, available on your favorite podcast platforms.