Nowfal Khadar, expanding on the Jevons paradox (production efficiency leading to higher demand), which is frequently mentioned when discussing AI and employment:
Once demand saturates, employment doesn’t further increase but holds steady at peak demand. But as automation continues and workers keep getting more productive, employment starts to decline. In textiles, mechanization enabled massive output growth but ultimately displaced workers once consumption plateaued while automation and productivity continued climbing. We probably don’t need infinite clothing. Similarly, a patient will likely never need a million radiology reports, no matter how cheap they become and so radiologists will eventually hit a ceiling. We don’t need infinite food, clothing, tax returns, and so on. […]
Until now, handcrafted software was the constraint. Expensive software engineers and their our labor costs limited what companies could afford to build. Automation changes this equation by making those engineers far more productive. Both consumer and enterprise software markets suggest significant unmet demand because businesses have consistently left projects unbuilt.
The key unknown is how long that will go on for, and how much of the demand for software can be fulfilled by AI alone. We might end up in a world with more software and fewer developers.