I worry about AI taking jobs. Not mine, of course. I'm irreplaceable. No, I worry about AI taking other people's jobs. Maybe yours. In this I am not alone. Lots of people are talking about all the jobs that AI is going to automate out of existence. The job apocalypse, they call it, as our Penny Crosman writes.
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Nobody knows for sure of course just how many jobs will disappear, but I think people underestimate how many jobs would have to disappear for us to have some real problems. Think of it this way: At the height of the 1982 recession, the official unemployment rate reached 10.2%. In the wake of the 2008 financial crisis, when the jobs reports showed hundreds of thousands of people being thrown out of work on a monthly basis, the unemployment rate again hit 10%. At the height of the pandemic unemployment very briefly reached 14.8%. During the Great Depression, the unemployment rate reached 25%.
In March, Jack Dorsey laid off 40% of his staff, and said other CEOs would start doing it, too. Standard Chartered plans to lay off more than 15% of its staff. Anthropic's CEO, Dario Amodei, thinks up to 20% of all jobs could be automated in the next few years (though the company says it's seen limited effects so far). If Amodei's prediction is right, the economic damage would be almost as severe as the Great Depression. If every CEO followed Dorsey's lead, it would be worse. You can understand why people are nervous. It's gotten so serious, the pope issued an entire letter about it on Monday, Magnifica Humanitas. The Vatican's not a content mill, you know. They don't write about things unless the Pope feels they matter.
U.S. Bureau of Labor Statistics, via Federal Reserve Bank of St. Louis
"The pursuit of greater profits cannot justify choices that systematically sacrifice jobs," the pope wrote, "because the human person is an end, not a means, and the economic order must remain subordinate to human dignity and the common good."
Right now banks, like most businesses, are seeing AI in terms of efficiency and cost cutting, as our Maria Volkova points out. The pope's point is that it's about more than just the jobs. AI could really usher in a sea change in how we structure our entire society. As Penny pointed out, both Jamie Dimon and David Solomon argued that we will need some large-scale, organized response to this level of disruption, and though they didn't put it in starkly moral tones the way the pope did, all three are thinking along the same lines. I figure we've got maybe five years to figure this out, which is the good news. If we start thinking about this creatively now rather than pretending it isn't happening, we can come up with some solutions. I mean, we put a man on the moon, for crying out loud. We should be able to cope with the end of work.
Was this the thing you were worried about?
The crypto exchange Coinbase this week re-launched its direct deposit service, our Melinda Huspen reports. The service allows the exchange's clients to put money directly from their paycheck into their Coinbase account. Not into a government-insured bank account where it will earn, um, well, not much but at least it's safe. No, Coinbase is trying to convince people to inject their money directly into the crypto markets. Maybe they get rich. Maybe they get rekt. Hey, what's the difference, right? It's all about the LOLZ.
At first blush this seems like the whole yield thing that the banks have been fighting over because direct deposit is a core feature of bank accounts. But one thing that doesn't get directly deposited in the users' accounts is interest. Coinbase can't offer that. So it's not a directly competing service. It is however directly competing for people's money, and that could be a problem for banks.
On the other hand, Coinbase has already tried this once before. It ran a direct-deposit program from 2021 to 2024, and told American Banker that it killed it with the idea of rebuilding it and making it better. OK. But it also could be that a lot of people just weren't interested. Coinbase's biggest problem is that its main business just isn't growing, because people are not flocking to the crypto market. Coinbase posted a $400 million loss in the first quarter (how do you know it was a loss? Because they buried it on page 18). And as I've written before, its key user metric, called monthly transacting users, has not grown in five years. I'm not so sure that making it more convenient and easy to lose your money in the crypto markets is going to be the way to attract new users.
Paul Vigna is the managing editor of American Banker. He is an author, journalist, editor and speaker, with a particular focus on capital markets and... Read full bio
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