April 13, 2026

The below transcript is a translation of the podcast audio that has been machine generated by Notta.

Hi everyone, this is Taylor St. Germain with ITR Economics. Thanks so much for joining me on this episode of TrendsTalk. We at ITR, you’re a political and unbiased source of economic intelligence. And today I wanted to talk about jobs, layoffs, and AI.

We discussed AI a couple of weeks back, but I wanted to really dig into some of the jobs numbers. I get a lot of questions out there right now of, are we in a weak labor market? How much is AI disrupting quits, layoffs, the broader job market, and what’s the impact on wages? So I wanted to unpack some of those trends in a very quick, succinct way. But I wanted to remind you of a chart that I had brought up previously, because the way I’m going to format this conversation today is really white collar versus blue collar, and highlighting some of the different impacts. I shared with you a few weeks ago on a prior TrendsTalk, the different industries and companies that are reporting using AI over a two-week span.

So I wanted to lay out this data in this way. There are a number of industries that have above a 20% utilization rate of AI, number of industries and roles, but there are a number of industries that have below a 20% AI utilization. So let me call out those that are above 20%. We’ve got administrative and support roles, healthcare and social assistance, multiple, we have multiple sectors in finance and insurance. We have education, professional services, and information services. Everything I just listed, over a two-week span in January, reported in AI usage over 20%. As many of you have probably come to the conclusion, those are primarily white collar positions, white collar roles, white collar sectors. When you look at those industries that have below a 20% utilization, you have mining and oil and gas, forestry, transportation, construction, retail trade, manufacturing, utilities, and wholesale trade. Primarily blue collar industries, right? So you can see how disproportionate the utilization rates are for those white collar industries with AI versus the industries that would be classified as more of those blue collar roles.

But really what I’m leading into with this setup is ultimately how this is impacting the labor market in terms of quit levels and in terms of layoffs. And we have a lot of great data in this regard. This data comes from the Bureau of Labor Statistics. If you look at three categories, information services, finance and insurance, and professional and business services, those are all, again, typically white collar type roles. And information services and professional and business services, despite seeing the higher AI utilization rate, actually still have quit numbers, excuse me, that are below the 10-year average. So still in the information service sector, the professional and business service sector, yes, are there layoffs happening? Are there quits happening? The answer to that is yes, but the quit levels are still historically below the 10-year average. Finance and insurance is the one exception. Finance and insurance has a higher quit level today than the historical 10-year average that we’re looking at. So I think you can see a little bit of the AI impact on an industry like finance and insurance, as folks are looking for other avenues, maybe concerns about AI replacement there.

But if you look at manufacturing, construction, and wholesale trade quit levels, all three of those industries have quit levels today that are much lower than their 10-year average. People that have manufacturing, construction, and wholesale trade jobs are not quitting their jobs right now. But I’m giving you a perspective of quits, right? So out of all of these industries, finance and insurance is the only industry that has a quit level above the 10-year average. But those are voluntary moves, right? Let’s look at the involuntary moves, which is ultimately layoffs. I’m going to look at the same three sectors. Information services, financial services, and professional and business services all have layoff numbers above the 10-year average. So while people might not be quitting information in professional business services, they are getting laid off above the 10-year average. You can see the AI impact, right? Those white collar industries have higher utilization rates and we are seeing the layoffs impacting the white collar industries as those layoff numbers are above the 10-year average. But again, that brings me back down to manufacturing, construction, and wholesale trade. Those three blue collar industries, those layoff numbers, are they happening? Yes, but below the 10-year average. So again, my message to you here is, it’s clear AI is having a disproportionate impact on the white collar industries compared to the blue collar industries. And this is something we’ve talked about a lot at ITR, which is we don’t have enough trades, we don’t have enough skilled workers, we don’t have enough of the blue collar individuals, and that’s why their quit levels are low, and that’s why their layoff numbers are low. The white collar space is ultimately a space that is feeling the impact from AI.

Now, folks, our forecast for the cost of labor over the course of the next four years is that we see a 20.1% increase in the cost of labor. Now, as you can imagine, that is much more heavily weighted towards those blue collar industries. And we see that in the data. The BLS gives us average hourly earnings of blue collar workers compared to white collar workers. And that average hourly earning number is, that gap is closing. As of today, the average hourly earnings of a blue collar worker is $36.70 an hour. The average white collar hourly earnings is $45.94 per hour. There is less than a $10 hourly difference between these trends. This is why we constantly hear a lot of folks saying, hey, when my kids are asking what to do when they grow up, should I be pushing them more towards the trade, more towards some of these blue collar industries? And the answer is, if you’re thinking of this financially, and you’re thinking about this from a job opportunity, being a little bit more immune to layoffs, then the answer to that’s probably yes. We need a lot of those individuals in our country. And again, we’re not really seeing the AI impact as significant on those blue collar industries compared to some of these white collar industries.

The irony of me sitting here in my white collar shirt, of course, it’s something we think about a lot at ITR in terms of its impact on the economy. Folks, I don’t wanna minimize the impact of AI. AI needs to be a tool that we leverage. We are leveraging it here at ITR to make us leaner and meaner from a forecasting and productivity standpoint. And we need to continue to do that in our businesses. But I don’t think AI is that silver bullet that folks are considering as we think about the labor market, because so much of the labor market is challenged by our shortage of blue collar workers. Again, most of this data I shared with you comes from the Census Bureau and the BLS. So please head over to their websites and check it out. I’m here to help you out with these trends. These are something we’re constantly reviewing here at ITR. Please check out our trends report. We forecast the labor market. Let us know how we can help as we really try to understand the impact of AI on the workforce and what the implications are as we look out into the economy here in the future.

I hope you found this information helpful. Thanks so much for joining me on this episode of TrendsTalk. Please like and subscribe to TrendsTalk wherever you listen to your podcasts. We look forward to seeing you all in the next one. Thanks so much. Take care for now.