Economist Justin Wolfers said the artificial intelligence shock to labor markets may resemble what happened to diamonds once lab-grown alternatives hit the market, not eliminating jobs entirely but sharply reducing the worth of certain tasks.
‘Lab-Grown Diamonds Didn’t Abolish Diamonds’
“Lab-grown diamonds didn’t abolish diamonds; they changed pricing power,” Wolfers said in a post on X.
“Same with AI: many jobs won’t vanish, but the value of some tasks may fall sharply.”
During an episode of his podcast ‘Off the Clock’ with Bloomberg Business Week columnist Stacey Vanek Smith, Wolfers discussed how lab-grown diamonds have rocked prices in the diamond industry, with a stone once worth roughly $6,000 now selling for as little as $10 at Walmart Inc. (NASDAQ:WMT).
‘The World Now Has More Sparkles’
Wolfers said the shift is ultimately good news, not bad, saying “the world now has more sparkles because sparkles got so cheap you can buy them for 10 bucks from Walmart” and that no one has to work in a mine, “which is a dark, dangerous, difficult place to be.”
He said the same trade-off applies to AI, comparing the loss of mining jobs to the disruption AI could bring to knowledge work.
Vanek Smith pushed back on the idea that AI job losses will be offset by better jobs down the line, asking what happens to “the people who lose their jobs in the moment.”
‘In the Future We’re All Lab-Grown Diamonds’
The economist said lab-grown diamonds are “essentially the AI of diamonds,” an enormous supply shock that has driven the price of what he called “cognitive work” toward zero.
“There’s now lab-grown Stacys and lab-grown Justins,” he said, adding that “in the future, we’re all lab-grown diamonds.”
AI-related Layoffs Persist
Earlier this month, Bank of America found little evidence that AI is causing broad job losses, examining employment across 206 industries and finding virtually no correlation between AI exposure and job growth.
Still, some companies have cut jobs while citing AI, with Meta Platforms Inc. (NASDAQ:META) laying off 8,000 employees in May, and Oracle Corp. (NYSE:ORCL) reportedly planning another round of cuts tied to its AI infrastructure spending.
Companies including Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corp. (NASDAQ:MSFT) and Block Inc. (NYSE:XYZ) have also cited AI-driven efficiencies and restructuring as they cut thousands of jobs.
Benzinga edge rankings indicate Meta’s stock has a Momentum score in the 11th percentile and a Growth score in the 75th percentile.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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