Apollo Global Management chief economist Torsten Sløk has a message for those bracing for an AI-induced job apocalypse. Efficiency breeds expansion. AI won’t gut white-collar ranks. It will swell them. Sløk dubs this the ‘Jevons employment effect,’ borrowing from a 19th-century observation that upended expectations about resource use.
William Stanley Jevons spotted it in 1865. Steam engines burned coal more cleanly. Britain expected less consumption. Instead, coal use soared. Cheaper energy fueled factories, railroads, ships. Demand exploded. Total input rose. Sløk swaps coal for labor. ‘Giving AI tools to knowledge workers will lower the cost of doing some of these tasks,’ he writes in his Daily Spark note. ‘And when things get cheaper, demand goes up.’
Legal services. Consulting. Finance. AI slashes per-task costs there now. Firms hire more lawyers, analysts, advisors. Why? Clients buy more when prices drop. Addressable markets balloon. Sløk’s charts show professional work costs plunging through the decade. Consumption? Skyrocketing. Youth unemployment dipped to 5.6% in March. New business formations hit U.S. records. Software developer postings on Indeed climbed since ChatGPT’s debut, even as total listings fell.
This flies against doomers. Citrini Research warns of white-collar wipeouts, recessions by 2026. Business Insider details Sløk’s pushback: cheaper inputs don’t shrink industries. They grow them. Morgan Stanley’s Andrew Slimmon chimes in. AI mirrors the internet. Massive job creator.
But. History rhymes, doesn’t always repeat perfectly. Goldman Sachs sees AI agents trimming payrolls. Their analysis pins a 0.1 percentage point unemployment bump on substitution effects, hitting entry-level hardest. Wage gaps widen. Recent grads face 5.7% unemployment, worst since the pandemic, per New York Fed data shared on X. SignalFire notes entry-level tech postings down 67% from 2023-2024. Displacement real. Especially juniors.
Jevons still holds sway in elastic markets. Box CEO Aaron Levie spots it in security. AI uncovers 100x more vulnerabilities. Triage, fixes, decisions need humans. Software? More code generated. More maintenance. More architects. Fortune echoes Sløk: swap ‘people’ for ‘coal.’ Markets expand. Radiologists thrive despite AI reads. Demand surges for scans, reviews.
Government reports nod along. The White House’s 2026 Economic Report flags mixed signals. Early-career coders, customer service see hits. Overall unemployment? 4.4%. Jevons kicks in if productivity jumps, prices fall, demand outpaces savings. Agriculture irrigation. LED bulbs. Roads. All boosted resource use. AI could too—for labor. Brynjolfsson studies show AI-exposed firms grow revenue, profits, headcount.
Critics push back. Perplexity’s Aravind Srinivas shrugs at losses: most hate jobs anyway. Mo Gawdat, ex-Google, sees 30-50% unemployment. Capitalism crumbles without labor arbitrage. X debates rage. Krishna Tammireddy warns saturated demand—like mortgage underwriting—pockets margins, cuts teams. Pilots win. Bookkeepers lose.
Elasticity decides. Demand elastic? Lawyers multiply. Inelastic? Tellers vanish. BCG flags expandable outputs: digital products, features. Unmet needs persist. MIT Sloan tracks 2010-2023. AI boosts firm growth, offsets losses via efficiency. No mass shedding.
Sløk’s bottom line? AI lifts productivity and employment. Youth hiring up 5.6% past year. Entry crunch? Digestion phase. X user APIsfromwithin calls it: companies scale output, need humans to steer. Goldman Sachs’ own report invokes Jevons for software engineering. More code, more demand.
Policymakers watch. Economists shift. New York Times notes growing conviction: disruption looms. Upskilling urgent. 77% of AI jobs demand master’s. Gaps widen. But Jevons whispers opportunity. Cheaper cognition unlocks personalization, analysis, experiments. Humans direct. Machines execute.
Entry rungs wobble. Experienced thrive. Firms expand tiers: premium humans oversee agent fleets. Aaron Kwittken on LinkedIn sees PR labor shortages. Efficiency multiplies work. George Hoyem’s Substack: losses sharp, localized. Creation slow, broad.
AI tests capitalism’s core. Abundant output, scarce buyers if jobs vanish. Yet patterns persist. Electrification birthed mass employment. PCs spawned finance empires. Internet minted e-commerce legions. AI? Same groove. Sløk bets boom. Data hints he’s early right.
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