Dawn of the three-hour work week: AI's impact on employment and compensation

Vienna | Published in AI and Board | 10 minute read | Share this post on X Share this post on LinkedIn Share this post by Email Copy the Permalink to this post

A futuristic office seamlessly blended with a beach setting. It shows humans relaxing and working alongside AI robots, reflecting a balanced lifestyle where work and leisure coexist harmoniously (Image generated by ChatGPT 4o).

As artificial intelligence (AI) advances into the workplace rapidly, one of the most pressing questions on everyone’s mind is, “If machines can do our jobs faster, more accurately, and at a lower cost, what happens to us?” It’s true that AI is beginning to redefine the very essence of work, raising concerns about the potential displacement of knowledge workers. However, I’d like to propose an alternative perspective—one where those same workers earn the same or more whilst working far fewer hours.

AI’s transformative power is evident across various industries, from manufacturing and finance to customer service. Its capacity to process extensive datasets and execute complex decisions rapidly far exceeds human capabilities. AI-driven robots have revolutionised production lines, while algorithms in finance undertake transactions and risk assessments with unprecedented speed and accuracy. Customer service bots provide continuous support, handling inquiries around the clock. These examples showcase just a fraction of AI’s potential to transform industries.

As businesses integrate AI more deeply into their core operations, the primary appeal lies in its potential to drastically cut costs and exponentially increase output. By automating routine tasks, companies can redirect resources towards enhancing strategic planning and innovation. While this shift suggests a potential reduction in demand for traditional labour, it also leads to a concurrent rise in the need for sophisticated oversight and management of these intelligent systems.

The unparalleled value of human insight

In an AI-driven economy, the most crucial roles for humans will likely transition from routine task execution to those that emphasise oversight, strategy, and ethical management of technology. Skills such as critical thinking, creativity, and complex problem-solving will become invaluable—competencies that AI has yet to master. Human workers will need to ensure that AI operates within ethical bounds, making judgements that align with societal values and business ethics.

Humans bring an irreplaceable depth of understanding, empathy, and ethical considerations that machines are fundamentally unable to replicate. For instance, in healthcare, while AI can diagnose based on data, human doctors assess and empathise with patient concerns and are crucial in the healing process. Similarly, in business, while AI can analyse market data, human managers understand client nuances and can forge strategic relationships and trust, which are vital for long-term success.

Justifying reduced hours and increased compensation

The justification for drastically reducing work hours while maintaining or even increasing pay hinges on the exceptional value and rarity of these advanced human skills in an AI-driven context. As AI handles more routine and quantitative tasks, the human role becomes more focused on governance, ethical considerations, and strategic oversight—tasks that require a level of insight and decision-making that AI cannot achieve.

This shift means that although the number of hours spent on traditional tasks may decrease, the impact and value of the hours spent by humans will increase significantly. Companies will be willing to pay a premium for these skills as they become the drivers of critical business outcomes and innovation. Thus, even a few hours of focused, strategic work each week could generate as much, if not more, value than the traditional 40-hour work schedule.

Training AI and sharing the benefits

Another crucial consideration is the training typically needed to make AI useful to organisations. When employees train AI models, their experience and knowledge become embedded in the training model. The company whose model they trained continues to benefit from their expertise even after they have stopped paying them. To that end, there is ongoing value to the company in having this part of the employee’s knowledge be part of their business. For that, there should be an equitable sharing of the benefits gained from the companies’ ability to do more with less.

Precedents for this already exist. In Hollywood in 2023, the Writers Guild of America (WGA) went on strike over a labour dispute with the Alliance of Motion Picture and Television Producers (AMPTP), securing significant concessions regarding the use of generative AI in their new contract with the AMPTP. The key points of the agreement include:

  1. Non-mandatory use of AI: Studios are prohibited from requiring writers to use AI tools in their writing process. Writers can choose to use AI, but it cannot be mandated by the studios.

  2. Transparency and disclosure: If studios provide writers with AI-generated materials, they must disclose this fact. This ensures writers are aware of any AI involvement in the material they are working with.

  3. Prohibition on using writers’ work for AI training: The contract includes language that protects writers’ works from being used to train AI systems without their consent. This clause aims to prevent the exploitation of writers’ material for the development of generative AI.

  4. Compensation and credits: AI cannot be credited alongside human writers, and its use will not impact the compensation, credit, or separated rights of the writers. Writers working on AI-generated material will be paid regular rates as if they worked on any other script.

These measures are designed to ensure that writers retain control over their creative work and are fairly compensated, even as generative AI becomes more prevalent in the industry.

Similarly, actors are getting “AI clauses” written into their contracts. The Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) has successfully negotiated several key protections regarding the use of artificial intelligence:

  1. Consent for use of digital likeness: Studios must obtain explicit consent from actors before using their digital likenesses. This includes scenarios where AI might create “synthetic performers” using an actor’s features. The union will also have the right to bargain for compensation on behalf of the actors whose likenesses are used.

  2. Prohibition of unauthorized scans: The contract prohibits studios from scanning an actor’s likeness and using it perpetually without their consent and proper compensation. This prevents a scenario where an actor’s image could be used indefinitely without additional pay.

  3. Disclosure requirements: Studios are required to inform actors if AI-generated materials will be used and must get permission from every actor whose features are involved. This ensures transparency and control over how an actor’s likeness is utilized in productions.

These measures are designed to protect actors from being replaced or unfairly compensated in an era where AI technology is becoming increasingly prevalent in the entertainment industry. The union’s proactive stance aims to ensure that actors retain control over their digital identities and receive fair compensation for the use of their likenesses.

So, this begs the question; why shouldn’t knowledge workers or anyone else have the same protections?

The transition to an AI-driven economy is not without challenges. Workers must adapt to changing job requirements by acquiring AI-related skills and knowledge. Upskilling and reskilling programmes are essential to ensure that workers remain competitive in the job market.

Organisations must also foster a culture that embraces innovation and empowers employees to thrive in the AI era. Addressing concerns about job displacement and ensuring a smooth transition to the new work paradigm are crucial for social stability and economic equity.

Potential challenges include economic disparity between those who can adapt and those who may face displacement, the mental and social impact of reduced working hours, and the need for regulatory and ethical oversight as businesses push the boundaries of AI.

Conclusion

As AI moves into the mainstream, we are faced with a pivotal decision: to fear the future or to embrace it. The rapid advancements in artificial intelligence present an unprecedented opportunity to redefine the nature of work and enhance our quality of life. By recognizing the symbiotic relationship between humans and AI, we can unlock new levels of efficiency, innovation, and prosperity.

The potential for a shorter work week and equitable compensation is within reach, but it requires a fundamental shift in how we value human oversight and creativity. Far from being adversaries, AI and human intelligence are most potent when they collaborate. AI’s computational power combined with human creativity, empathy, and ethical judgment can drive critical business outcomes and foster a more balanced work-life environment.

It is crucial to ensure that as AI becomes more integrated into our workplaces, we protect the roles that only humans can perform. By implementing equitable benefit-sharing models and safeguarding workers’ rights, we can create a future where AI serves as a tool to enhance human potential rather than replace it.