Embracing AI, Remote Work, and Solving Labor Shortage: Future Unveiled.


  • Artificial intelligence (AI) will change the nature of work, but the extent to which it will impact specific jobs depends on factors such as the importance of location and the tasks involved.
  • The tight labor market is driven by long-standing demographic trends, including low growth of the working-age population. This will result in a shortage of workers in the coming years.
  • The Covid-19 pandemic has introduced many office workers to remote work, and while some prefer it, there is a belief among managers that remote workers are less productive.
  • The integration of AI into office work will increase productivity and lower demand for those workers. However, AI will have less impact on hands-on work, such as construction and manufacturing.
  • Overall, the future of work will be task-specific, with a growing demand for hands-on workers and specialized tools using AI to assist office workers. Remote work will become part of the wage bargain.

Artificial intelligence will change the nature of work in the coming years, interacting with demographics and remote work desire. There is no one future of work that applies to all jobs, but for any specific job, the future depends on how important location is and how much AI will impact the tasks involved. But for all work, the ongoing tight labor market will loom large.

Today’s tight labor market comes not from pandemic-related changes but from long-standing demographic trends. Hiring new workers was difficult and unemployment was unusually low in 2018 and 2019, before the coronavirus arose. The problem was low growth of the working-age population. The change, from one census to the next, of the population aged 25 to 65 is currently the lowest since the Civil War! The history is shown in my article, “The Scariest Chart For Business In The Coming Decade: Workers Not Available,” published in 2018. Since that article was written, foreign immigration has proved lower than projected, pulling our working-age population projections down even lower than before. The era of huge gains in working-age population, from 1970 through 2010, coincided with large increases in the female labor force participation rate. That accentuated the abundance of job-seekers. Since 2009, however, female interest in working has leveled off. So the labor force has been roughly stagnant. The demographics argue for a continuing tight labor market. That will ease—just a little—in the decade from 2030 to 2040. In the meantime, workers will be in short supply.

The Covid pandemic introduced many office workers to the possibility of remote work. Independent consultants and freelancers had been working from home for years, but corporate employees had to work remotely during lockdowns. And many of them liked it. Some missed the camaraderie around the coffee pot and celebrating team members’ birthdays, but others felt relieved not to commute in. Some were more distracted without a boss looking on, but others concentrated more without hearing co-workers chatting in an open office or cube farm. The bottom line is that a significant number of office workers, but not all, want to work from home. Managers have a different opinion: they believe remote workers accomplish less. A recent Harvard Business Review article highlighted managers’ lower estimates of remote work productivity than employees’ estimates. Also notable, though, is that nearly half of both employees and managers think productivity is about the same working remotely as in the office. Recently evidence arose of remote workers being less likely to be promoted. Forty years ago the managers would have won the battle. Job applicants were plentiful due to population growth and women entering the workforce. Today, though, the manager who insists on in-office work loses out on talented workers. Elon Musk had to walk back his hardcore office work policy at Twitter. Managers will balance their estimates of productivity versus the salaries needed to get people into the office. Remote work looked to be a major part of the future of work for office occupations.

Now throw artificial intelligence into the mix. The impact will be different depending on whether the work is clerical and administrative or hands-on. For most office workers, generative AI, such as ChatGPT, will increase productivity, lowering the demand for such workers. The tight labor market for these occupations will not be so tight, and worker bargaining power will be lower. Wage growth in this sector will be slower, but the preference for remote work will remain. Managers who insist on office work will still have to pay up to get employees, but from a lower base. The managers who will make the best decisions will have solid data on productivity rather than gut feel and tradition. However, productivity is difficult to measure in many fields.

AI will have less impact on hands-on work: construction, stocking shelves, manufacturing, cooking and serving food, cleaning offices and hotels. Robotics have helped automate much factory work, but their limitations have become apparent. Speaking with several robotics engineers I learned that the machine learning techniques behind artificial intelligence require lots of data. That data is harder to acquire in the physical world. For example, robot welders in the automobile industry work on the exact same weld, in the exact same environment, time after time. The welder on a high-rise office project make different welds in varying temperature and wind conditions. The AI could help do the job—after it collects a million or so observations of actual work. Right now it seems that robotics development has plateaued, with the most talented computer scientists shifting to large language models. Robotics will probably achieve some breakthroughs in the future, but it’s hard to see a major revolution coming quickly.

Artificial intelligence can certainly help with many parts of the hands-on world. Carpenters will still cut boards, but the contractor’s cost estimate and bill of materials will be created with the help of AI. The computer won’t cook a steak, but the AI can help figure out how many steaks diners will order tomorrow, reducing expensive waste. AI, combined with sensors, can help get the right worker to the right place at the right time. Restrooms will still be cleaned by hand for many years to come, but they won’t sit dirty for long with good AI-driven monitoring systems. Potholes may be filled before they become large.

The future of work will be very task-specific. Demand for hands-on workers will grow while supply won’t, pushing wages up and leading employers to offer better working conditions. Office roles will be assisted by specialized tools using artificial intelligence, reducing demand for such workers. The resulting equilibrium could entail falling wages, though greater productivity will lower consumer cost of living across the board. Remote work will become part of the wage bargain, with employers offering that option to keep their costs down.