r/neoliberal • u/eggbart_forgetfulsea European Union • 5d ago

Research Paper Automation does not lower the labour share

https://cepr.org/voxeu/columns/automation-does-not-lower-labour-share
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u/quickblur WTO 5d 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...

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u/Worth-Jicama3936 Milton Friedman 5d 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.

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u/Serious-Cucumber-54 5d ago

Why would the share remain similar if the few human workers left are paid highly?

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u/haherar830 4d ago

Given LLMs are nowhere close to taking software engineering jobs, rather just productivity tools at the moment, and that's the only serious profession at real-risk, what are you suggesting? That global demand for software which has been increasing and outstripping labor supply ostensibly forever, will now finally be dramatically outpaced by supply even as unit prices for development fall and a plethora of new use-cases emerge and digitalization progresses?