Part II – San Bernardino Sun

An Amazon truck pulls into one of the company’s enormous fulfillment centers at 4950 Goodman in Eastvale, where the company operates three warehouses with more than 1.9 million square feet. Fulfillment centers like this one prepare orders to be trucked to “last-mile” delivery stations for distribution to customers’ homes and businesses. Amazon operates at least 19 local fulfillment centers, sorting centers and air cargo facilities mainly in the Inland Empire, with nearly 13 million square feet. (Photo by Watchara Phomicinda, The Press-Enterprise/SCNG)

By Manfred Keil and Sasha Rothstein | Inland Empire Economic Partnership

Last month, we asked ChatGPT for a short economic analysis of the Inland Empire. The results were less than impressive and we still have our jobs: ChatGPT’s responses were mostly factually incorrect.

To further test the artificial intelligence (AI), we set up a different scenario this week. With the chief economist of the Inland Empire Economic Partnership (IEEP), Manfred Keil, on one side of the laptop, we asked ChatGPT to respond to a conversation as if it were Keil (we also imagined that the Keil ChatGPT had fuller hair).

Overall, the results were much more impressive than during our last interaction, but there remains some room for improvement. What we have learned is that if you narrow the choices that ChatGPT has for looking up facts, it helps the program significantly to avoid making mistakes. For example, in the question below, we asked specifically what Keil would have said. We believe this allows the program to eliminate news generated by other forecasters in the region.

This article comes with an important caveat. Both interactions with ChatGPT looked at GPT-3, the third generation of the AI program. The mother company has made the next generation, GPT-4, publicly accessible. This new generation AI has demonstrated significant gains over GPT-3, for example, passing the legal bar exam in the top 10%. While we and other economists have yet to test GPT-4, we expect that the program may also have improved performance in economic analysis.

Since we consider this to be a shoot-out, we break down our conversation into The Good, The Bad, and The Ugly.

The Good

The answers in this section reflect very much what Keil would have said, for example, at last month’s State of the Region conference.

Question: What do you think of the current economic state of the Inland Empire?

ChatGPT: As an economist, I believe the Inland Empire region has been doing relatively well economically in recent years. The region has experienced consistent growth in employment and output, and the unemployment rate has been steadily declining. However, the region still faces some challenges, including a relatively high poverty rate, a shortage of affordable housing, and persistent issues related to air quality and transportation infrastructure. These challenges will require ongoing efforts from policymakers, businesses, and the community to address. Overall, I remain cautiously optimistic about the economic outlook for the Inland Empire, and I believe the region has a strong potential for continued growth and development in the years to come.

Question: Are you aware of the fact that Governor Newsom has been asked to place a moratorium on warehouse building in the Inland Empire?

ChatGPT: I am aware of the previous proposals and debates surrounding a potential moratorium on warehouse construction in the Inland Empire. The region has experienced significant growth in warehouse and logistics development in recent years, driven in part by the rise of e-commerce and online shopping. While this growth has brought economic benefits to the region, it has also raised concerns about the environmental and social impacts of warehouse development, including issues related to air quality, traffic congestion, and community displacement. Some policymakers and community groups have called for a temporary moratorium on warehouse development to allow for more comprehensive planning and policy solutions to address these issues. It remains to be seen whether Governor Newsom will take action on this proposal or other related measures.

Question: What can the Inland Empire do to reduce the daily commuting of much of its labor force to the coastal regions?

ChatGPT: Reducing the daily commuting of much of the Inland Empire’s labor force to the coastal regions is a complex issue that will require a multifaceted approach. Some potential strategies that could be considered include:

1. Encouraging the development of high-paying, knowledge-based jobs in the Inland Empire. One of the main drivers of commuting to coastal regions is the concentration of high-paying jobs in those areas. By promoting the development of similar jobs in the Inland Empire, policymakers and economic development organizations could reduce the need for workers to commute long distances.
2. Investing in public transportation infrastructure. Improved public transportation infrastructure, such as expanded bus and rail services, could make it easier and more affordable for workers to commute within the Inland Empire and reduce the need to travel to coastal regions.
3. Supporting the development of walkable, mixed-use communities. By creating communities that combine residential, commercial, and recreational uses, workers could live closer to their jobs and reduce their commuting times.
4. Encouraging telecommuting and flexible work arrangements. The COVID-19 pandemic has shown that many jobs can be performed remotely. Encouraging telecommuting and flexible work arrangements could reduce the need for workers to commute long distances every day.

Overall, reducing daily commuting in the Inland Empire will require a coordinated effort from multiple stakeholders, including businesses, government agencies, and community organizations.

The Bad

The Inland Empire Economic Council is more pessimistic than what ChatGPT describes below. Education levels in the Inland Empire, such as the percent of residents with at least a bachelor’s degree, are substantially lower than in other regions we would like to converge toward. There is little chance for the current labor force to pick up a significant number of jobs in programming, maintenance and equipment operation.

Question: What do you think the effect of automation is going to have on the logistics industry in the Inland Empire?

ChatGPT: Automation is likely to have a significant impact on the logistics industry in the Inland Empire, as it has the potential to increase efficiency and reduce costs for warehouse and distribution center operators. Many logistics companies are already investing in automation technologies such as robotics, artificial intelligence, and autonomous vehicles to streamline their operations and increase productivity. In the short term, this trend towards automation is likely to create new job opportunities in areas such as programming, maintenance, and equipment operation.

However, in the long term, there is a risk that automation could lead to significant job displacement in the logistics industry, particularly for workers in low-skilled, repetitive tasks. This could have significant social and economic impacts on the Inland Empire region, where logistics and warehousing are major employers. To mitigate these risks, it will be important for policymakers, businesses, and labor organizations to work together to develop strategies to support affected workers and to promote retraining and upskilling opportunities to prepare workers for new, higher-skilled roles in the logistics industry.

The Ugly

We have forecasted a recession within the next 12-month period with a high probability. While most economists agree with us, there are some that are more optimistic. According to our analysis of current data and trends, alarm bells are ringing, warning us of an imminent volcanic outbreak (a recession). Time to take precautionary measures.