AI Adoption Fuels Hiring, Not Layoffs, New Data Shows
AI Adoption Fuels Hiring, Not Layoffs, New Data Shows
Publish Date: 2026-07-13 13:35:00
Source Domain: www.pymnts.com
In 1865, English economist William Stanley Jevons observed that improving the efficiency of steam engines increased Britain’s coal consumption instead of reducing it.
More efficient engines made coal-powered production cheaper, so more industries adopted it and expanded operations.
Over 160 years later, Jevons’ observation, now known as the Jevons paradox, has become one of the most frequently cited frameworks in the debate over artificial intelligence and jobs
Applied to knowledge work, the argument is that when AI lowers the cost of a cognitive task, demand for that task may rise enough to increase the total volume of work performed. Apollo Global Management Chief Economist Torsten Slok made that case directly in an April client note, calling it the “Jevons employment effect.”
“When steam engines made coal more efficient, Britain didn’t burn less coal, it burned more,” Slok wrote. “The same pattern is happening for cheaper legal services, consulting services and financial services.”
OpenAI Chief Economist Aaron Chatterji made a similar point last month.
“When the price of something goes down, if demand is elastic, people might buy more of it,” Chatterji said June 30 at the European Central Bank’s ECB Forum on Central Banking.
Corporate card firm Ramp and workforce analytics firm Revelio Labs found empirical evidence for the hypothesis. They published “A New Look at AI’s Impact on Jobs,” a study of 21,559 firms in the United States from January 2021 through February 2026, linking observed AI spending to workforce records.
The study found that high-intensity adopters, defined as firms spending an average of $33.67 per employee per month on AI in their first three months, grew headcount 10.2% over the two years following adoption. Entry-level headcount grew 12%. Low-intensity adopters, spending an average of $2.78 per employee per month, showed no statistically significant employment change. The gains appeared across engineering,…
