The AI jobs apocalypse hasn’t landed in Australia – yet

Artificial intelligence is starting to hurt the prospects of employees including clerks and telemarketers, ground-breaking research shows, just as Australian businesses embark on a $155 billion data centre spending spree that is growing faster than the 2010s mining boom.

Based on nationwide payroll data, research by Monash University economist Zac Gross reveals that while there are early signs the AI revolution is softening some parts of the job market, it is yet to hit the wages of people most exposed to the technology.

Data from the Australian Bureau of Statistics found that in the first three months of the year, businesses spent a record $6 billion on equipment and machinery linked to AI – a 400 per cent increase in one year.

Once new buildings are taken into account, businesses have spent a record $21.8 billion on AI and IT over the past 12 months. Every other part of the economy, including mining, was either flat or had slightly reduced capital spending over the period.

Gross said his research, taken directly from the payrolls of businesses, showed the impact of large language models was yet to hit the nation’s jobs market.

But he did find that between 2022 and today, hiring had been weaker in those occupations most at threat of being replaced by AI. These included jobs such as accounting clerks, keyboard operators, positions in human resources and telemarketers.

Gross said while certain job positions were weaker than others, and some firms had laid off staff, the overall jobs market had yet to be disrupted by AI.

“These results don’t cancel the AI apocalypse, but they certainly postpone it,” he said.

“Even for occupations whose deaths have been heralded, such as software engineers and telemarketers, we see relatively little weakness in the labour market.

“Software engineers’ earnings have grown at around the national average, even as AI has become a major part of their job. The same is true for telemarketers and call centre operators who might be substituted for AI.”

Gross said jobs in advisory or managerial occupations that may be at risk from AI, such as bank workers and financial advisers, were softer than 2022 but not as depressed as those that could be more easily replaced by the technology.

His research also suggested AI has yet to hit the wages of workers.

He did find, however, that firms that were adopting AI were enjoying stronger earnings growth than those businesses not yet using it. But within those firms, the salaries for people whose jobs were at risk of being replaced by AI were not growing as fast as those safe from the technology.

Australia is home to one of the biggest increases in data centre and AI-related infrastructure in the developed world. The nation’s largest data centre, at 350 hectares, is being planned for Melbourne’s outer west by Syncline Energy.

Analysis by Westpac suggests there is a pipeline for $155 billion worth of projects.

Westpac senior economist Pat Bustamante said demand for data had increased exponentially as AI and other emerging technologies were adopted by households and businesses.

He said the pipeline of new data centres was unprecedented, arguing it would have significant implications for economic growth and employment.

“Combined with the potential renewables pipeline, which amounts to around $200 billion of actual and possible projects, it is clear Australia is in the midst of a structural changing period of capital deepening,” he said.

“When data centres are in place, facilitating widespread adoption of AI and emerging technologies, we will see the real payoffs for productivity growth. The economic impacts during the production phase will be the focus of a forthcoming note.”

Separate research by NAB senior economists Sally Auld and Taylor Nugent showed there had been a clear under-performance among occupations most at risk from AI.

They found occupations most exposed to AI had total employment and hours worked 9 per cent lower than jobs not threatened by AI since 2022.

For every 10 per cent of a person’s job that could be replaced by current AI, employment growth was 2 per cent slower than those safe from the technology.

Auld and Nugent said about 15 per cent of all jobs were highly or significantly exposed to AI.

“Our analysis suggests that the impact of AI is now evident in labour market data in Australia,” they said.

“There are likely to be different crosscurrents impacting the labour market as AI adoption widens. Some jobs will be lost, new jobs will be created and many will be augmented by AI. In addition, stronger productivity growth, if realised, will lift real wages and aggregated demand.”

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