The model of Artificial Intelligence and the Future of Inequality takes into consideration what could happen if an army of robots engage in economic activity autonomously. The autonomy of the robot is very important, since that differentiates robots from mere physical capital. The implications of the model were that the more manager robots there were, the better the lower skilled workers would be. Also income inequality would be reduced, this will happen because human managers would face more and better competition.
However, technological improvements in robotics and automation have yielded very different results at least in the short term. These improvements tend to reduce the cost of production and improve efficiency while increasing the production of the good. But this reduction in costs is a consequence of a lesser demand of labor. Without doubt the debate of whether technological improvement impoverishes the poor or benefits them is still prevalent.
I am going to show small fragments that renowned economists wrote that raise opposing ideas, with this I seek to start a debate and know your opinions on this topic.
Laura Tyson has a clear position: “On balance, automation reduces demand for low- and middle-skill labor in lower-paying routine tasks, while increasing demand for high-skill, high-earning labor performing abstract tasks that require technical and problem-solving skills. Simply put, technological change is skill-biased. Over the last 30 years or so, skill-biased technological change has fueled the polarization of both employment and wages, with median workers facing real wage stagnation and non-college-educated workers suffering a significant decline in their real earnings. Such polarization fuels rising inequality in the distribution of labor income, which in turn drives growth in overall income inequality – a dynamic that many economists, from David Autor to Thomas Piketty, have emphasized.”
Ricardo Hausmann puts both ideas in contrast, “To pessimists, the introduction of these so-called general-purpose technologies – including 3-D printing, artificial intelligence, and the Internet of Things – threatens the demand for labor; without new forms of social solidarity, such as a universal basic income, the future will be one of widespread destitution. To optimists, the latest technological developments, like others that have propelled humanity forward, promise to deliver unprecedented levels of prosperity.”
Martin Feldstein is more optimistic “The steady stream of improvements in driverless cars has convinced me that before too long the roads will be filled with cars and trucks operating without humans at the wheel. Likewise, I am convinced that the revolution in artificial intelligence will allow computers and robots to do many of the tasks that white-collar workers now do. It’s not surprising, therefore, that many people are worried about the fate of those whose jobs are vulnerable – or have already been lost – to the latest disruptive technology. What will happen to the millions of men and women who now drive trucks and taxis when the trucks and taxis can drive themselves? What will happen to the accountants and health workers when computers can do their jobs?” And adds latter “Why am I so optimistic? Simply put: history. Rapid technical change is not something new. We have experienced technological change that substitutes machines and computers for individual workers for many years. And yet, despite the ups and downs of the business cycle, the US economy continues to return to full employment.”
Labor Markets in the Age of Automation by Laura Tyson
Making the Future Work for Us by Ricard Hausmann
How Scary is Disruptive Technology? by Martin Feldstein
In Project Syndicate web-page 2017. https://www.project-syndicate.org/