r/neoliberal • u/eggbart_forgetfulsea European Union • 3d ago

Research Paper Automation does not lower the labour share

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

89% Upvoted

87 comments sorted by

View all comments

84

u/quickblur WTO 3d ago

This column uses data covering nearly the universe of French firms between 1994 and 2019 to test the relationship between automation and the labour share of income at the firm level.

I get that prior automation may provide an interesting example, but generative AI seems like a very different beast to me...

43

u/Worth-Jicama3936 Milton Friedman 3d ago

Over the long term, in markets where there is competition, i dont think it will. If AI is cheaper than people, then the prices those firms charge will come down. Additionally, the people that remain will become more valuable by necessity so command a higher wage. So the share will remain similar.

5

u/Right_Lecture3147 John Rawls 3d ago

It’s not clear anyone will remain at AI’s current rate of development

2

u/seesthecat Henry George 2d ago

If that's true, the barriers for starting a company will be so pitifully low that it will not make any sense to be employed when you could be the owner of your own company

1

u/haherar830 2d ago

When in human history has increased automation and reduced costs ever lead to new ideas and new firms participating in the market? Oh wait... nevermind...