The relentless march of artificial intelligence (AI) continues to reshape the digital landscape, showing no signs of slowing. From everyday assistance to automated content creation, workers are understandably anxious about the integration of AI tools and their potential impact on the future of labor.
Popular AI tools—chatbots, image and video generators, and development platforms—have surged in popularity due to their efficient, real-time responses and cost-effectiveness. However, this efficiency raises serious concerns about the future of manual labor.
In an exclusive interview, Manuel Muñiz, provost of IE University and chair of IE New York College, shed light on how the increasing automation of the workforce is disrupting the labor market as AI's influence grows.
Manuel Muñiz, provost of IE University and chair of IE New York College (PIDS photo)“There’s a lot of noise in the work that is being done in the automation space, [one of it] is having an effect on income distribution, [and] how income is distributed in the economy,” he told reporters. “It seems to be changing the relationship between the proportion of income that goes to wages and the proportion of income that goes to capital.”
Muñiz observed a concerning trend: a significant portion of income is accruing to capital rather than being balanced with employee wages. This, he argues, could “enable gains in productivity and in output without fostering gains in wages—basically in immediate wages.”
Widening labor market divide
Furthermore, Muñiz noted a widening divide within the labor market, as automation renders certain tasks obsolete.
A study by Jobstreet, an online work platform, revealed that 46 percent of Filipinos now utilize generative AI in their work and personal lives, with those in digitalization, data science, and information technology (IT) industries leading the charge.
While automation can streamline workflows, it also necessitates a re-evaluation of budget and financial resource allocation, particularly in labor and operations.
The Philippine Statistics Authority (PSA) recently reported that the number of jobless Filipinos reached 2.16 million in January. Notably, sectors such as manufacturing, professional, scientific and technical activities, arts and entertainment, construction, and information and communication saw the largest annual decreases in employment.
Muñiz suggests that the integration of advanced technology into the workforce has contributed to a gradual reduction in the demand for highly qualified workers, a trend likely exacerbated by significant economic shifts driven by AI adoption (among other factors).
This shift carries profound societal implications, including political ramifications, as the erosion of a robust middle class can fuel greater social and political polarization.
“This is problematic. I’ve been writing about this for quite some time and speaking about it because this is leading to the erosion of the [western] middle class. The middle labor income earners in an advanced economy and the hollowing of our middle class is clearly accompanied by the hollowing of our political spectrum,” he emphasized.
Political, regulatory intervention needed
“There is a direct line between tech revolution and the fact that we’re not really intermediating it in any major way through legislature, taxation, and anti-competition policy, or other political dynamics [in the West]. We need to be very careful with how we manage this moving forward, because if we don’t we’re going to end up in a political landscape that is going to be very volatile and complicated to navigate,” Muñiz warned.
To address this growing crisis, Muñiz advocates for treating AI-generated content analysis as a business opportunity and pushing for legislation that mandates proper AI labeling and management.
“It’s in fact a golden age for entrepreneurship, right? These challenges I mentioned on the income and wage front also tell you it’s a wonderful time to be an entrepreneur… Become a capitalist or to own capital and move into a text base.”
Acknowledging AI's inevitable presence, he urges strategic utilization.
“Think of ways of being entrepreneurial, and think of ways in which these technologies can solve problems in the industry, [even those] that have not changed for a long time and have been unchangeable and immovable.”
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