In the late 1800s, almost half of the American workforce was in agriculture. Today, less than 2% of America’s workforce is in ag.
Mechanized farming (trucks, tractors, combines, etc.) freed those workers to build cars and airplanes, then write software, teach Pilates, and make YouTube videos (and serve what is one of modern America’s greatest inventions: the Dairy Queen ice cream cone).
That did not happen overnight, of course, so some of those unemployed farmers were out of work for a while.
At JVM, AI currently creates our highly sought-after finance flyers (we send out 900 per week; let us know if you need one); it reads purchase contracts, spots issues, and inputs all the data for us; it reads loan guidelines and shops for the best loan programs for every borrower; it calculates income; it reads bank statements; it reads every document and stacks them neatly in a loan file; it does a large portion of our SEO work and online marketing; and it helps edit blogs about AI job gaps. So, our AI has already replaced an enormous amount of human labor.
Sidebar: Within a few years, AI will eat the entire mortgage industry. Borrowers will input a bit of data, and the system will automatically complete the application, credit pull, loan approval, underwriting, and loan option presentations within minutes. We’re already seeing this with HELOCs.
I’ve written many times about how AI will create more jobs than it wipes out, because we’ve seen that play out with so many other technologies, starting with the wheel and including computers and the internet (which created tens of millions of jobs nobody could foresee, e.g., Uber drivers, drone pilots, web developers, online retailers, content creators, influencers, etc.).
AI will also create millions of unforeseen jobs, as new tech always does. The questions are how long it will take and whether the government will slow down the transition.
The AI job gap is good for rates, though, because the Fed and the bond market focus very closely on the labor market.
Peter St. Onge illuminates what’s happening in this short video: The No Hire, No Fire Economy.
AI is already creating some jobs, but not enough yet to offset the jobs it’s eliminating – so we’re in a sort of limbo with very few net new job creations (college grads and inexperienced workers are getting hit hardest, while experienced workers with AI skills are doing well).
And that slow job growth is helping to keep rates from climbing even higher (what’s bad for the economy and other humans is often good for rates, as I mention often).
What Could Slow Down The Transition To New Jobs: Government Red Tape.
St. Onge reminds us that new jobs were created so quickly after the mechanization revolution because starting businesses was so easy. Today, however, all kinds of employment, permitting, zoning, and licensing rules make it much harder.
Tech businesses blossomed in the 1990s and early 2000s, often because they operated outside the control of a government that didn’t understand them (fortunately).
Anyway – let’s hope our government does not keep future jobs at bay…
We All Better Learn To Speak Fluent AI
I mentioned above that AI will eat the mortgage industry – which is exactly why we are not only on the AI train, but we’re also feeding it fuel and trying to drive it faster.
We want to be at the front of the automation curve so we can offer much lower-rate mortgages, with humans stepping in whenever a human interface is necessary (and yes, humans will still be necessary).
St. Onge said that workers who use and “speak” AI are doing much better than others. That will be the case for everyone in years to come, but they will need to speak it fluently.
