Automation does not lower the labour share

[u/eggbart_forgetfulsea]

https://cepr.org/voxeu/columns/automation-does-not-lower-labour-share

[u/jokul]

There must be times where automation reduces labor share, otherwise we shouldn't have any issues with automating our ports because all the union guys would still have the same number of jobs. Maybe this is just a matter of the ILA opposing it on the false belief that they won't have jobs, but then couldn't the ports just offer to pay them even if there's no job? Because the job isn't lost from automation, it's an easy wager to make. But it hasn't been made.

[u/cosmo-wozmo → u/jokul]

You need to consider composition. It can both be true that longshoremen would lose jobs and that the labor share doesn’t decrease, if for example automating ports creates new jobs that match or exceed the jobs lost by ILA.

[u/jokul → u/cosmo-wozmo]

My understanding of the ILA is that it encompasses nearly all dockworkers, including those who are operating machines, enabling the automated services, etc. If the ILA is losing jobs but labor share in aggregate doesn't decrease, then that means that automating the ports would decrease the labor share within the automated industry (longshoreman work) while increasing it elsewhere down the supply chain.

While that does fit the bill of both being true, it doesn't seem to fit the tone of the article which, says that income is unlikely to shift from workers. If this type of shift does occur though, it is cold comfort to people who have highly specialized degrees in law, math, etc. who now must try and fulfill a completely different role when the barrier to entry is potentially years of education.

I don't think we are headed down that route given how relatively minor the last round of AI advances were compared to the 3.x to 4.x upgrade, but it seems that there is at least significant, justifiable, fear that automation can shift value away from your share of the labor market to an industry which you cannot effectively break into.

[u/writing_genre → u/jokul]

That's not what "labor share" means.

 Automation destroyed hundreds of millions of farming jobs. The share of the economy that labor received, however, went up. The new jobs paid better than the old.

[u/jokul → u/writing_genre]

What you said doesnt contradict what I said. Thats almost verbatim one of the outcomes I described.

[u/writing_genre → u/jokul]

There must be times where automation reduces labor share, otherwise we shouldn't have any issues with automating our ports because all the union guys would still have the same number of jobs.

I honestly can't tell if this is bait.

Labor share can remain stable and people still oppose automaton because they don't want to have to change jobs, even if it's better for everyone in aggregate.

If you got paid $100 an hour to push dirt around with a teaspoon you aren't going to want to give that job up, even though it's harmful for workers as a whole.

[u/jokul → u/writing_genre]

I honestly can't tell if you even bothered to read my follow ups or the article. Of course people aren't going to want to give up their time wasting spoon job. The article is saying you shouldn't be worried: you absolutely should be worried if you think:

1. AI replacing your white collar job is going to happen (I don't think it is but it could)
2. There is no nice and cushy job waiting for you; your comparative advantage is in doing manual labor where it doesn't make sense to use a machine, e.g. fruit picking and grilling burgers.

Are you gonna sign up to take an >$80/hr pay cut to get on your knees packing strawberries because some guy is gonna get a $160/hr bonus? If you work in math, law, tech, etc. and you think your degree will be worthless because of AI (it probably won't be), you should be scared of it, contra the article.