Say goodbye to most customer service jobs.
Spotlight Phoenix, AZ.
The Wall Street Journal reports Phoenix Built an Empire of Cubicle Jobs. AI Is Coming to Tear It Down.
Abundant land and cheap labor made Phoenix a premier place for companies to stash lower-paid office workers who don’t need to be physically close to clients or headquarters. The cubicle-based jobs—customer service, data entry, payroll processing—created a vital ladder to the middle class, helping replace factory work lost to overseas competition.
Now, these white-collar jobs are fading, too, thanks to continued offshoring and, increasingly, artificial intelligence. Tens of thousands of local workers suddenly face an uncertain future.
A test grader saw her work outsourced to India. A customer-relations manager, recently laid off and his savings running low, is looking to become a bartender.
“I’m concerned that a lot of call-center workers will not have jobs pretty soon, me included,” said Vonda Wilkins, a Phoenix-based customer-service representative.
Many of her co-workers lost their jobs last year as their employer, Lumen Technologies, relied more on AI to engage with customers and landline use continued to drop. The technology has made her work more challenging, Wilkins says: Customers who reach her often had to talk first to bots and are more likely to be in a bad mood. The 49-year-old is making plans to go to nursing school.
Offshoring has been chipping away at back-office jobs for decades. Yet around 16.5 million Americans work in office- and administrative-support jobs like customer-service reps, office clerks and data-entry keyers, according to the Labor Department. That’s still more than the number working in manufacturing, but also down from around 18 million at the end of 2019. The number of customer-service representatives in metro Phoenix alone has tumbled 26% in the most recent four-year span the department measured.
Between 2000 and 2019, the number of people working in manufacturing fell by 26%, according to the Labor Department. During that period, full-time customer-service reps grew by 32%.
The jobs were often easy to get, required little training and generally paid better than retail and fast-food jobs. They also offered better opportunities to advance.
Call-center gigs got people into corporate offices and taught valuable soft skills like solving problems and talking to strangers. That helped workers climb the ladder to higher-paying careers like sales, said Mark Muro, senior fellow at the think tank Brookings Metro.
Now, with those entry-level jobs disappearing, there’s danger that “the pathways that provide mobility disintegrate and you lose the American promise of opportunity,” Muro said.
Geoff McGehee, 54, was laid off from his job as a senior customer-relationship manager at Sears Home Services in October. Before he lost his job, the company was aggressively rolling out AI to replace human customer-service workers, and McGehee helped integrate it into the company’s processes.
“I was literally digging my own grave,” he said.
He’s since applied for hundreds of back-office jobs, but hasn’t had any luck. With his savings dwindling, McGehee is widening his search. He’s started applying for bartending jobs—he recently took a two-week bartending course—and has considered training to become an electrician, which he considers more AI-proof.
“At least I can rewire my house,” he said.
Metro Phoenix Employment
The Black Hole
For decades, Jeff Seifert’s Tempe, Ariz.-based company Professional Placement/Pro-Tem Service has supplied local offices with accountants, office administrators and customer-service reps, among other roles. Demand plummeted over the past year, although it’s improved a little in recent months, he said.
Job seekers who walk through his door these days often complain about not getting any responses to their applications. “I’ve heard tons of candidates call it a black hole,” Seifert said.
Office- and administrative-support jobs are fading faster than manufacturing jobs are added. And the new blue-collar work is rarely a ready option for unemployed former office workers, according to employment-services professionals.
Musical Tribute
Get a Job was a big hit tune. And that’s a great video for early rock and roll fans.
Well every morning about this time (Sha-na-na-na, sha-na-na-na-na)
She gets me out of bed, a-crying get a job (Sha-na-na-na, sha-na-na-na-na)
After breakfast everyday she throws the want ads right my way
And never fails to say – get a jobLord, and when I get the paper I read it through and through
I, my girl never fail to see if there is any work for me…
I got to go back to the house, hear that woman’s mouth
Preachin’ and a cryin’, tell me that I’m lyin’ about a job
That I never could find
Fun Fact
The revival group Sha Na Na derived their name from the song’s doo-wop introduction.
They performed it at Woodstock in 1969.
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Here’s a breakdown of BLS Business Employment Dynamics (BED) by sector.
Read David Graeber’s book “Bullshit Jobs”. He brilliantly lays out that most white-collar jobs are completely unnecessary to start with. In reality, we are well past the point of diminishing returns on human labor. An attorney friend of mine once remarked that if everyone would just do the right thing to start with, there would never be a need for a lawyer, laws, judges, police or politicians.
AI answered phone calls are often dead ends.
Good luck getting that genie back into the bottle.
The best job in the US is realtor. Every time the fed prints, you get an automatic raise!
An uncle of mine who became a recluse later in life told me about his first job. He started his career back in the days when “Leave it to Beaver” aired. IMO that time period was the peak of American prosperity, where the American dream was achievable for everyone.
His first job? He worked in the “benefits research” department of a national insurance company. I had never heard of such a thing. That’s the department that decided what the best benefits were to offer their employees to retain them (that’s how he put it).
What motivated that concept? My uncle told me companies were afraid of being unionized and they would do everything they could to keep their non-unionized workers happy.
Something to think about. Today, unions are dead and benefits research departments are just a memory. I wonder if there’s a connection? /s
GM bought Electronic Data Systems back in the late ’80’s. I went to work for EDS as an entry-level programmer just after the acquisition. The pay and bennies were top notch. Something I’ve never seen since and I worked for the government for 4 years. I was told it was because GM did not want us to join the UAW.
I got an Ai agent more than a year ago about problems with my router. I knew because it was complementing me way too much. It was limited but it should get better. Ai will be taking admin jobs more and more. The government is absolutely bloated with admins. It would be a great way to pare down federal jobs and costs. One positive for customers is getting assistance in plain English with no accents to decipher. The world is changing. This will hurt places like India too. But that’s capitalism. If we guarantee everyone a job, then we have socialism. But red hatters say that’s communism. Red hats want a hand up, not a hand out. Going to be a challenge. There’s still a lot of blue collar jobs out there. But they need more training.
There is considerable shortages of labor in the crafts and trades and data centers are in need of electricians and plumbers. These are good well paying jobs and it doesn’t hurt to get one’s hands dirty at work.
Septic and sewer contractors will always do well.
Is anyone here concerned about calling a customer service ( that happened to be outsourced to India) running the risk of having private info stolen and sold to black market? Not to mention having to deal with the heavy Indian accent…..
Due to the amount of robo-calls getting thru on my phone, my vocabulary of Indian curse words has expanded quite a bit.
No more so than ai agent with access to my data that can be talked into regurgitating it.
There is no way to conclusively test a language model’s fitness for a given application. Without a human in the loop, it will eventually do something crazy..
What if the AI voices mimic an Indian accent just to mess with us?
Can you send the AI to the IRS or my health insurance provider–neither can actually address customer service. But if I want to know the status of a refund or if I have a question about where to make a payment—both silly, trivial issues/questions with 10 different ways to find the answer without speaking to someone–then they can help me with their IVR. I was told yesterday that the IRS bot is able to answer full questions. Um, no…no they can’t. Send me the #@!) AI becuase I can’t get through to even ask a person a question…and when I do, they give no answer or wrong answers.
I fear AI’s labor/societal impact but much of it is of our own making. We made ourselves expensive and we refused to be competent. Once chip prices relative to peformance crashed it is and was inevitable that the expensive incompetent humans would be replaced.
Watch a lot of professions get impacted. I have used it to discuss complex legal situations or financial planning and within seconds I am 95% of the way.
Others have said folks need jobs to pay plumbers and electricians. Yep, but homeowners (and remaining businesses) NEED those services, often times RIGHT NOW, up to code, can’t be wrong, can’t afford a catastrophic flood or fire. They’ll spend whatever amount of their social security check or stock portfolio to get service OR we’ll have a rapid entry into the trades to increase the supply of those services and prices will drop. Economic forces, like gravity, eventually hold.
The AI data centers have employed lots of the trades to scale up and will continue to need service. Maybe after we have expensive, limited electricity, water shortages, labor destruction, heat production…maybe we’ll be a lot less nice to the AI data centers. Who knows.
everyone can move to the medical world (aides, nurses, etc) to take care of the failing bodies of the unemployed
that works until…
I sure hope Musk figured out that whole UBI thing
2-Star Mishelin award for music tribute and facing ugly reality.
Every passing day I use AI more and more and it’s not even for work, it’s for personal use. You can now build personal AI assistants with cheap tools on the net. AI has built some apps for me to make money off the market. I’m going to work on one to squeeze polymarket.
Accountants, financial advisors, heck CFOs and all corporate functions are all going to be on the chopping block.
This guy built an autonomous AI trading bot.
https://www.youtube.com/watch?v=6MC1XqZSltw
Got retirement and exit strategy?
Legal assistants and low level lawyers. Probably a lot of shrinks too since chatbots can do that.
You have to be licensed by the state to practice law, even to represent a client in traffic court. Same with therapists. There is already one state suing OpenAI over this.
So in 2016 some genius – the Godfather of AI – predicted computer programs would replace radiologists. Around that time I advised a kid to go into radiology. They did that. Now that kid is making 7 figures a year. Because there is a shortage of radiologists. They’re still making the same prediction. My prediction: the kid will soon be making multiple 7 figures a year.
My son-in-law just signed a contract to work as a radiologist for $675,000/year with six weeks of vacation, and he still has a year of residency left. He isn’t too worried about AI yet. The hurdle is liability.
Become a plumber. You’ll always have job fixing/remodeling some middle manager’s house. Whoops.
That assumes they have money to pay for your plumbing services. Most people don’t understand that they mostly feed off of the sharks. The big shark rips to shred a target and the “remora” eat the crumbs left over.
The “sharks” in this example are the white collar workers and the “remora” are the plumbers, carpenters, electricians that feed off of the crumbs.
Silicon Valley average salary is like $300k, how many people feed off that one person? Restaurants, trades people, retail shops? Who will they feed off of when that guy loses his job to AI? Is AI going to stop by a coffee shop or build a new deck out back?
Middle managers jobs are going away also.
As someone in the industry, I’ll echo Woodsie below and say that it’s not really AI that’s able to do most of these jobs to the point of replacing them. It’s Indians.
This is a full blown offshoring crisis that’s only going to further drive ugly xenophobia in America as well as likely ratcheting up the feeling that corporations are out to gut America. If you ask me MAGA was a reflection of this fear, but now that it has failed you’ll see it reflected in a wave of leftist politicians who will promise ripped off young voters that they’ll punish this behavior.
The kids need to wake up first… and that’s not very probable. They haven’t for generations.
Except the kids have woken up, it was obstinate baby boomers who put Trump in charge to stop them and those boomers will now enjoy having their benefits cut as payment for their wisdom. I hope it was worth it to round up the brown people the economy was relying on.
That’s the problem with kids, they don’t have the experience to know when something isn’t the way it used to be and that these things are actually a political choice. By the time they figure it out, it’s too late.
COVID basically showed companies that half their office staff didn’t need to be in an office at all. After that revelation, outsourcing those roles became an obvious cost‑cutting move.
This. The internet company ‘Pinterest’ was supposed to be the primary tenant in a new skyscraper in San Francisco leasing over 400,000 sq ft. Then Covid hit and the company found out that work could be performed just as well from home. They decided to cancel their multi-year in the new building. The cancellation cost them over $80M dollars. OUCH!
I’m always tickled when people think companies discovered outsourcing during Covid.
Outsourcing has been going on for 3+ decades now.
“… has considered training to become an electrician, which he considers more AI-proof. ”
Of course, that assumes that people have other jobs where they can earn the money they can pay the electrician for his work.
Well, there’s currently good work wiring data centers. /s
I noticed that the article seems to focus alot on jobs being outsourced to India. Outsourcing to India are the biggest drivers of the job losses in the referenced areas not AI. At least that’s been my anecdotal experience.
They’re doing the needful for us.
Just use the correct prompt and create your own perfect AI job: work from home, 4 hrs/ day 4 days/week, $300K + car + expenses to start.
I queried ChatGPT and it said this was the best job plan ever, and I am brilliant.
I have no idea what these people are whining about, this issue is so trivial, I solved it in 1 minute. No wonder they are unemployed.