Can GDP grow while jobs disappear? Economists weigh in on what Singapore’s AI push must get right
Prof Powdthavee noted that in general, the link between growth and employment weakens when growth is accompanied by rising inequality. “A country can grow even if most of the gains go to a very small group at the top,” he said. For example, if firms become more profitable by replacing workers with AI, a country’s GDP will rise because output is higher and costs are lower. “But that kind of growth doesn’t require more workers, and it may even reduce labour demand,” said Prof Powdthavee. “This is why growth doesn’t necessarily, or automatically, generate jobs.” When productivity gains mainly benefit those who own capital, technology or data, the economy can “look healthy on paper” while wages stagnate and job opportunities “fail to expand for everyone else”, he said. “In that sense, growth is real, but its benefits are narrowly shared.” Prof Loh said that AI and automation can now perform tasks at levels comparable to humans, which is a negating factor for job growth. Innovation and efficiency gain – where companies gain experience and rely …
