Workers Living in These Regions Could Be More Vulnerable to the Impact Of AI

Key Takeaways

• Workers in small metro areas and college towns may face greater threats of AI job displacement due to lower adaptive capacity.
• Workers in tech hubs like San Jose and Seattle are better positioned to adapt to AI-related job displacement due to higher savings and diverse skill sets.

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AI has the potential to displace workers across the country, but it could be particularly detrimental for those in small metro areas and college towns, new research finds.

In a National Bureau of Economic Research (NBER) paper published in January, researchers evaluated which workers would (and would not) be able to adapt if AI displaced their jobs.

To measure adaptive capacity, researchers looked at factors like liquid savings, age, location (specifically, population density, because denser areas enable “better job matching”), and transferability of skills. Having more savings, being younger, living in a denser area, and possessing more transferable skills were associated with higher adaptive capacity—that is, greater ability to manage a job loss.

What This Means For You

Even if your job is highly susceptible to being replaced by AI, having a cushion of savings, being located in a more densely populated city, and having skills that can be used in other jobs can help you navigate a job loss more easily.

Although workers in professions like software and web development were more exposed to AI (that is, they had jobs that involved many tasks that could potentially be automated by AI), they also had a greater capacity to adapt after losing a job.

In contrast, workers in clerical and customer service occupations—such as cashiers and secretaries —had jobs that were both highly exposed to AI and had lower adaptive capacity.

So while a software engineer may be at greater risk of being replaced by AI than a cashier, an engineer may be better able to weather a job loss due to their emergency fund and skill set.

Note: For adaptive capacity, a higher number means the worker is better positioned. Source: National Bureau of Economic Research. “How Adaptable Are American Workers to AI-Induced Job Displacement?”

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Workers in roles with higher AI exposure and low adaptive capacity are more concentrated in small metro areas and college towns in the Mountain West and Midwest, “where administrative and clerical positions supporting institutional employers are concentrated,” the researchers wrote. That means AI could disproportionately harm workers in regions such as Stillwater, Oklahoma and Springfield, Illinois.

In comparison, workers in areas with a large tech industry, like San Jose, California, and Seattle, Washington, may be less affected. These workers may have high exposure to AI, but they also have a higher capacity to adapt after displacement, as they have “higher savings and more diverse skill portfolios.”

Important

As Brookings researchers note, AI disruptions could strongly impact white collar workers, but the effect “may be partly mitigated by those workers’ savings, skills, and networks,” while “downside risks for less adaptive workers may be harder to manage.”

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