🤖 Are Machines Going to Take Our Jobs?

Moflin, from Kickstater

What is the compensation theory?

  1. Additional employment in the capital sector: the innovations that displace workers from their current roles create new jobs in the industries that create this innovation. The waiter gets replaced by a drone delivering food to the tables, but the waiter drives the drones and makes sure they follow optimal trajectories.
  2. Decrease in prices: machines have lower wages than humans, so firms could sell the product they produce at lower prices without harming the accounting. Lower prices are going to stimulate demand for products that will create new job opportunities. The hamburger starts costing 2€ each instead of 8–12€, and new unique burger shops with different prices could open.
  3. New investments: managers start accumulating extra profit thanks to the drop in the prices. Those extra-profit can be invested in new productions and jobs. For instance, with the main hamburger line automated by robots, the staff can start developing new recipes, expand hamburger online presence, assess customer tastes more accurately, and so on.
  4. Wages decrease: after the first wave of unemployment caused by robots, the wages decrease, which creates an increase in the demand of workers, and the job market adjusts. The job market of burger chef crumbles, but at the end, they live happily.
  5. Increases in incomes: in contrast with the fourth point, unions manage to inglobate the cost-saving benefits of automation into the national contracts. The Burgershop unions step in.
  6. New products: the automation process leads to the supply of new products that manage to create new activities. Waiters left home started developing cleaning products for robots.
  • Some may occur.
  • Others may not.
  • Some may be more dominant in specific industries or markets.
  • Anyone could not foresee the aggregated effects.

What’s next?

  • Acemoglu, D., Restrepo, P. (2016) The Race Between Machine and Man: Implications of Technology for Growth, Factor Shares and Employment, NBER Working Paper 22252.
  • Acemoglu, D. Autor, D. (2011), Skills, tasks and technologies: Implications for employment and earnings, Handbook of Labor Economics, 4: 1043–1171.
  • Brynjolfsson, E., McAfee, A. (2014) The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies, W. W. Norton & Company
  • «AI Expert Says Automation Could Replace 40% of Jobs in 15 Years». Fortune, https://fortune.com/2019/01/10/automation-replace-jobs

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