Research indicates that the application of generative artificial intelligence in the workplace, such as automated support roles for customers and employees and AI-generated coding programs, could widen the racial wealth gap between Black and White households in the United States by $43 billion by 2045. The research points out that there is an existing wealth gap and that Black workers are employed in occupations that expose them to the greatest risks of automation, thereby increasing the racial wealth gap and hindering the economic mobility of Black individuals.
Key Facts
Researchers from McKinsey Digital and the McKinsey Institute for Economic Mobility for Black Americans referenced a study from June that stated the United States is expected to create around $2 trillion in wealth from generative artificial intelligence, with $500 billion of that going to households, meaning each of the projected 143.4 million American households in 2045 would receive an average increase of $3,400 in new wealth.
The researchers noted that Black households receive only 38 cents of every dollar of new household wealth, so if the projections are accurate, the new wealth generated by generative artificial intelligence will widen the wealth gap by $43 billion.
In October, the Federal Reserve found that the median Black household had about $44,900 in wealth, which is only 15% of the median $285,000 for White households – a continuation of the expanding gap between Black and White wealth that has grown over the past four decades.
Impact on Black Workers
Black workers are also concentrated in the five occupations with the “highest mobility potential” – jobs that provide a living wage and opportunities for advancement without needing a degree – which are at the greatest risk of being taken over by automation: office support, production work, food services, and mechanical installation and repair. Between 2030 and 2060, researchers said generative artificial intelligence will be capable of performing half of the high mobility jobs, closing off employment as a means of upward mobility for Black workers.
The Reverse Impact
Researchers noted that generative artificial intelligence could also provide opportunities for upward mobility for Black workers by better tailoring financial products to Black workers to improve financial inclusion, using AI-powered programs to enhance digital skills, and making homeownership more accessible through generative AI tools that enhance credit scoring processes.
Historical Background
In 1870, shortly after the emancipation of slaves in the United States, White wealth in the United States was 23 times greater than Black wealth, according to the Federal Reserve Bank of Minneapolis. The ratio adjusted to eight to one by 1960 and reached five to one by 1980 due to the passage of civil rights legislation in the 1960s, including the Civil Rights Act of 1964, the Voting Rights Act of 1965, and the Fair Housing Act of 1968, along with changes to the federally mandated minimum wage under the Fair Labor Standards Act. However, since 1980, the racial wealth gap has increased by about 0.1% annually due to differences in capital gains – or previously owned wealth and the interest earned on that wealth – the Federal Reserve found. Unemployment rates among Black Americans are double those of White workers, according to a 2017 study from the Economic Policy Institute.
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Additional
Which Jobs Will AI Replace? These Four Industries Will Be Heavily Impacted (Forbes)
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