All around this desert city’s sprawling metro area, low-rise office parks with tinted windows and vast parking lots stretch to the horizon. This is America’s back office, writes The Wall Street Journal (May 26, 2026).
Abundant land and cheap labor made Phoenix the place for companies to place 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 increasingly to AI. Tens of thousands of local workers suddenly face an uncertain future. Job-placement firms that supply companies with back-office workers are seeing less demand and are cutting their own staff, too.
Many workers lost their jobs last year as their Phoenix employer, Lumen Technologies, relied more on AI to engage with customers and landline use continued to drop.
Around 16.5 million Americans still work in office support jobs like customer-service reps, office clerks and data-entry clerks. That’s more than the number working in manufacturing, but also down from around 18 million 6 years ago. The number of customer-service representatives in Phoenix alone has tumbled 26% in the past 4-years.
Losses are expected to mount as AI takes over the kind of basic, repetitive tasks that are often back-office hallmarks. The government projects jobs in this sector will fall the steepest among all major employment categories.
That has major ramifications for the American working class. Fifty years ago, factory jobs offered a path to the middle class for millions of Americans who didn’t have college degrees. As those jobs disappeared, lower-skill cubicle gigs helped fill the void. 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.
The race to retrain the workforce is already on. Local universities and community colleges have started offering training programs in AI and chip making. Advanced manufacturing is now the priority.
Classroom discussion questions:
- Where will these workers find new jobs?
- What are the benefits of AI in this sector?