Executive Summary 

• AI (artificial intelligence) adoption is accelerating across the economy, raising important questions about how the technology will reshape the labor market.

• Despite concerns about worker displacement, AI-exposed firms have so far seen stronger productivity and employment growth.

• Labor market trends largely align with expectations that AI will augment some jobs while automating others.

• Beyond its impact on existing jobs, AI may spur the creation of new businesses, industries, and occupations.

• Investors should expect the impact of AI to reinforce the “low hire, low fire” state of the U.S. labor market.  

AI adoption is accelerating, raising questions about its  impact on the labor market

Shown on the left are estimates of the share of U.S. businesses with paid subscriptions to AI models, platforms, and tools based on spending data from more than 70,000 businesses. Shown on the right is the percentage of individuals by self-reported frequency of AI use, based on a Pew Research Center survey conducted in September 2025. Actual results may differ materially from estimates or surveys.

• AI adoption has accelerated rapidly, with more than half of U.S. businesses now paying for AI subscriptions and nearly half of surveyed individuals using AI at least daily.

• As AI becomes increasingly embedded in the workplace, questions around its potential effects on the labor market are moving to the forefront, particularly given that last week’s employment report continued to highlight a labor market in a “low hire, low fire” state. 

Though some fear AI may displace workers, this has not been the case so far

Shown are average productivity growth (left panel) and headcount growth (right panel) since 2018 for firms in the highest (Most Exposed) and lowest (Least Exposed) quartiles of AI exposure. AI exposure is based on PricewaterhouseCoopers's industry-level classification of expected AI impact. Productivity is measured as revenue per employee. Past performance may not be indicative of future results.

• The early observations on AI’s impact on the labor market have bucked the conventional wisdom that AI is likely to become a net job destroyer. To the contrary, firms with business models that are more exposed to AI have experienced larger productivity gains alongside stronger headcount growth.

• Both measures have outpaced those of less AI-exposed firms, suggesting that greater exposure to the emerging technology has not come at the expense of employment growth thus far. 

AI can simultaneously make workers more productive and replace certain tasks altogether

Shown are payroll employment indexes for industries classified as primarily exposed to AI-driven automation, augmentation, or not impacted by AI, based on a Glenmede analysis of U.S. Bureau of Labor Statistics payroll industry categories. Indexes are rebased to 100 at the launch of ChatGPT in November 2022. Actual impacts from AI may differ materially from expectations.

• The impact of AI on employment depends on whether the technology augments workers by assisting with routine work or automates functions with limited need for human involvement.

• Since the launch of ChatGPT, which accelerated the adoption of generative AI, employment has risen in industries where AI is more likely to complement workers, while declining in those where it has greater potential to replace them. 

So far, the labor market is behaving as automation and augmentation theory suggests it should

Shown are projected changes in labor demand by occupation attributable to AI from McKinsey Global Institute between 2022 and 2030 (x-axis) and observed employment growth by occupation between 2022 and 2025 based on Occupational Employment and Wage Statistics (OEWS) data from the U.S. Bureau of Labor Statistics (y-axis). STEM refers to occupations in science, technology, engineering, and mathematics. Actual results may differ materially from projections.

• In theory, AI should help clear bottlenecks in operations associated with one of the scarcest resources in history: human-like intelligence.

• Occupations expected to benefit most from AI, including health care and STEM roles, have been projected to see rising labor demand and have delivered on those projections with strong employment growth since 2022.

• Meanwhile, occupations facing greater potential for AI-driven automation, such as office support and customer service, are experiencing employment losses relatively in-line with their theoretical exposures. 

Beyond its impacts on existing jobs, AI may create entirely new categories of occupations and business

Shown on the left are monthly new business applications in the U.S., measured in thousands. Shown on the right is employment by occupational category for occupations that existed in 1940 (orange) and occupations introduced after 1940 (green). Occupations are classified by identifying new occupations that appeared in U.S. Census data from 1940–2018 and linking them to employment levels.

• Beyond shifts in the mix of existing jobs, AI may actually lead to the creation of entirely new companies, industries, and occupation categories that have not previously existed.

• History provides a strong example of how technological innovation can create entirely new job categories. For example, 70% of employment today is in jobs that did not exist before 1940.

• Just as it may have been difficult to foresee a job title such as “social media influencer” a few decades ago, there may be entirely new categories of AI-related jobs that are difficult to fathom today. 

AI and demographic trends together may sustain the "low hire, low fire" environment near-term

Shown in blue are estimates of aggregate labor demand in the U.S., defined as the number of employed individuals plus job openings. Shown in green are estimates of aggregate labor supply in the U.S., defined as the number of employed plus unemployed individuals. Solid lines represent actual figures, and dashed lines represent projections based on Glenmede’s analysis. Actual results may differ materially from projections.

• As it stands now, AI's early impact on hiring is likely being offset by constrained labor supply, keeping the labor market in a “low hire, low fire” equilibrium.

• Longer-term, what matters most is the bigger picture of labor supply and demand, and AI is unlikely to affect the U.S. economy in a vacuum.

• The net impact of AI on employment will depend on a range of factors, including the health of the economy, demographic trends, the pace of adoption, and the labor market's ability to adapt.