The Future of Work: How AI is Reshaping the Labor Market

All new groundbreaking technologies spark fear of labor market disruption, and often with good reason. Electric streetlamps made lamplighters obsolete at the turn of the twentieth century. The automobile upended the horse-drawn carriage industry. The internet disrupted entire sectors, from media to retail to telecommunications. While new technologies can eliminate jobs in the short term, history has shown they also create entirely new industries and employment opportunities over time.

Artificial intelligence (AI) is the latest transformational force, and perhaps the most far-reaching yet. At Greenwood Hoff Wealth Management, we are closely watching how AI may reshape the future of work, the economy, and investment opportunities.

From the Ground Up

Technology adoption has always taken time. Thomas Edison installed the first private electric system in his home in 1878, but it took half a century before electricity reached 50% of U.S. households. The telephone, invented in 1876, took more than 70 years to reach the same milestone. Infrastructure challenges, particularly in rural areas, slowed the spread of these innovations.

Today, adoption cycles are much faster. With widespread electrical grids, internet access, cloud infrastructure, and mobile networks already in place, new technologies can scale more quickly than ever before.

The Digital Age

The nationwide electrical grid laid the foundation for the digital age. In 1984, only 8% of households had a personal computer; by 2000, that figure surpassed 50%. Today, nearly every household has access to a computer or smart device.

The internet further accelerated this transformation. In 1995, just 14% of households had internet access. By 2001, half were online. Today, more than 90% are connected.

Then came the smartphone. In 2011, only 35% of U.S. adults owned one. Now, more than 90% do, putting a computer in nearly every pocket. Technology that once took generations to spread now achieves universal adoption in less than a decade.

The Next Frontier: Artificial Intelligence

AI represents the next great leap. Already, AI is powering driverless car programs in San Francisco, Phoenix, and Los Angeles, with robo-taxis providing more than 250,000 paid rides each week. Beyond transportation, AI is being used for fraud detection, healthcare diagnostics, contract review, content creation, and even energy grid optimization.

Two forces are converging to reshape the labor market: the rise of AI and an aging population. Since 2000, the U.S. population over age 55 has grown by 78%, while the prime working-age population (ages 25–54) has grown by just 7%. With fewer younger workers entering the labor force, productivity gains will be essential to sustaining growth—and AI may provide that boost.

Tech companies are investing hundreds of billions into data centers, chip manufacturing, and infrastructure to support AI. Utility companies are expanding grid capacity to power these energy-hungry systems. According to the World Economic Forum, AI could result in a net gain of 78 million jobs globally by 2030. While some roles will be displaced, others will be created in industries we can’t yet fully envision.

A Changing Workforce

The U.S. labor market has undergone profound shifts before. In 1900, nearly 40% of Americans worked in agriculture; today, less than 1% do. Manufacturing once employed more than 30% of the labor force but now accounts for just 8%. Offshoring, automation, and robotics all played a role.

At the same time, service jobs have surged. In 1950, about 21 million Americans worked in services; today, more than 114 million do, accounting for 70% of total employment. Healthcare, professional services, and hospitality are the largest contributors.

AI will likely accelerate this trend, reducing demand for repetitive, rules-based roles while boosting demand for creative, analytical, and interpersonal skills. Early signs are already visible. Job growth has slowed in cyclical industries such as manufacturing and professional services, while healthcare and government roles continue to expand. Software developer job postings are also down, reflecting AI’s growing ability to handle coding and debugging tasks once performed by entry-level workers.

What’s Not Artificial

Despite all the change, one thing remains constant: the human need for connection. The COVID-19 pandemic underscored this truth. Technology helped us adapt, but isolation highlighted the irreplaceable value of face-to-face interaction.

For client-facing professions—financial advisors, lawyers, doctors, teachers, and sales professionals, AI will be a tool that enhances efficiency, not a replacement. By automating routine tasks, AI can free professionals to spend more time building relationships, solving complex problems, and providing personalized guidance.

As Michael Scott from The Office quipped, “It’s the people.” That truth will determine whether AI becomes smarter than today’s most advanced systems or not.

Market Implications

The stock market has already reflected excitement around AI. Since the current bull market began in October 2022, the S&P 500 has returned nearly 85%, the Nasdaq is up more than 100%, and the technology sector has gained 161%. Mega-cap tech companies now represent 39% of the S&P 500.

While these gains have been extraordinary, they also bring risk. High valuations leave little room for disappointment if earnings growth slows. Diversification remains a crucial strategy, especially as other sectors may benefit from AI adoption and productivity gains over time. History has shown that markets tend to broaden beyond early leaders as new technologies mature.

Adapting to What’s Next

The American workforce is made up of more than 170 million people. Some jobs will disappear, but new industries and opportunities will emerge. The challenge lies in bridging the transition through reskilling, workforce training, and widespread AI literacy.

For businesses, adaptability will be key. Those that integrate AI responsibly and effectively will likely gain a competitive edge in efficiency, cost savings, and innovation. For workers, embracing lifelong learning will be essential. And for investors, a diversified, forward-looking portfolio remains the best path through both the opportunities and uncertainties ahead.

Final Thoughts

Change is the only constant in the labor market. From the shift away from farms and factories to the rise of services and technology, the U.S. economy has continually evolved. Artificial intelligence represents the next great frontier. While disruption is inevitable, history suggests that innovation ultimately leads to progress.

At Greenwood Hoff Wealth Management, we remain optimistic about the future. We believe AI will augment human potential rather than replace it, create new industries, and drive productivity gains essential for long-term growth. For investors, this means balancing excitement about emerging technologies with disciplined diversification and a steady focus on long-term goals.

The future of work may look different, but one truth remains: people, and the connections we build, will always matter most.

Cetera Investors is a marketing name of Cetera Investment Services. Securities and Insurance products are offered through Cetera Investment Services LLC (doing insurance business in CA as CFG STC Insurance Agency LLC), and member FINRA/SIPC. Advisory services are offered through Cetera Investment Advisers, LLC. Office Address: 19 British American Blvd East, Latham, NY 12110. Phone# (518)724-5004. The material contained in this document was derived from the articles written by Cetera Investment Management LLC written in August 2025, which can be located on our website: www.greenwoodhoff.com . Commentaries are published by Cetera Investment Management LLC, an SEC registered adviser owned by Cetera Financial Group. 

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