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rise of smart machines and long term misery for workers

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rise of smart machines and long term misery for workers Empty rise of smart machines and long term misery for workers

Post by Propagandhi711 Thu Apr 07, 2016 5:51 pm

very interesting paper written by respected libbies on wage suppression and further misery in store for workers:

Are smarter machines our children’s friends? Or can they bring about a transfer from our relatively unskilled children to ourselves that leaves our children and, indeed, all our descendants – worse off? This, indeed, is the dire message of the model presented here in which smart machines substitute directly for young unskilled labor, but complement older skilled labor. The depression in the wages of the young then limits their ability to save and invest in their own skill acquisition and physical capital. This, in turn, means the next generation of young, initially unskilled workers, encounter an economy with less human and physical capital, which further drives down their wages. This process stabilizes through time, but potentially entails each newborn generation being worse off than its predecessor.

Can mechanization lead to misery for workers? The idea is an old one, dating at least to the Luddites. The fear is that machines substitute for workers and drive down their wages. The retort is that machines make workers more productive and drive up their wages. Economists have long ridiculed the Luddites based on a stubborn fact – average real wages grow in line with average labor productivity. But what if the Luddites are now getting it right -- not for labor as a whole, but for unskilled labor whose wages are no longer keeping up with the average? Indeed, what if machines are getting so smart, thanks to their microprocessor brains, that they no longer need unskilled labor to operate?


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