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This is an interesting question a lot of good labour economists have been thinking about for a while. There are a few conflicting theories as to what will happen. You could base a whole career on this question. This IGM survey will give you some idea as to what leading economists think. The prevailing opinion seems to be that increased automation is not ...


44

Automation has been happening for a couple of hundred years now and right now we're all still working pretty hard. Although a 40-hour working week is standard, many people exceed this, and many families have two working parents. One reason for this is that we've used productivity gains for increased consumption, rather than decreased work. The industrial ...


39

Here's an explanation from Paul Krugman. You can read more about this in Krugman's book End This Depression Now!. Since joining the Euro, Spain has experience large capital inflows—money flowing into Spain, mostly from Northern Europe. These inflows caused a boom in investment, coupled with an increase in prices of virtually everything (including labor) ...


32

Any invention that replaces human labor puts an end to that specific task. Glass recycling eliminates (or decrease) the need for silica-gathering task. Typewriter eliminates the need for printing press typesetter. Etc. Those people whose tasks are eliminated will get reallocated to their most productive use. This might be in the form of job change (silica ...


27

Your question relates to an important research topic on the link between automation and employment. David Autor works on this issue and the topic "Inequality, Technological Change and Globalization". He published a very recent and interesting JPE paper on “Why Are There Still So Many Jobs?” There have been periodic warnings in the last two centuries that ...


26

There are several explanations for this in the literature (the order does not necessarily reflect importance of each explanation). Different Price Levels: Non-trivial portion of the wage differential is due to different price levels/cost of living. Once you adjust for different price levels and compare real wages gap narrows. This is obvious but since you ...


22

This is more of an elaboration of The Almighty Bob's answer: It is true that if we start from a competitive market (i.e. large numbers of buyers and sellers), then granting market power to sellers (e.g. workers) by allowing the formation of a monopolistic cartel is bad for efficiency. Those sellers will use their market power to increase the price (and ...


22

Horses were replaced by cars. Clerks were replaced by word-processors and spreadsheets. We have adapted to the technology and changed how we work. Therein lies the answer. Consider if you will a society where every person owns a robot and has that robot work on their behalf, freeing their time to pursue creative arts and learning like the nobles of old. Yes, ...


22

The metric of median household income is also used by others to argue the presence of income inequality: https://en.wikipedia.org/wiki/Income_inequality_in_the_United_States#Causes However, it seems that it is not only the median but also the mean that stagnates: (I used family instead of household income because I could not find a time series for mean ...


21

I would add two more, and rather primitive, factors in @1muflon1 long list: Labor input is not perfectly mobile with respect to the wage. We should never forget that the concept of a utility function allows for arbitrary "goods" to be "utility enhancing". It follows that migrating in chase of a better wage does not always prevails when ...


19

There are already excellent answers, but I would like to add in a different perspective: There will be fewer people. Not just jobs, but actual human beings - if there is less demand for human workers (i.e. laborers), due to machines taking over, the amount of "land" or other resource that a single human can manage will increase with technology, leading ...


16

The Labor Theory of Value has been replaced by the theory of Marginal Utility, which was already accepted by Marx time. In fact he acknowledged: "nothing can have value, without being an object of utility" -Wikipedia: Marginal Utility - The Marginal Revolution and Marxism Marginal Utility addresses the diamond - water paradox by explaining that the more ...


15

How will non-rich citizens make a living if jobs keep getting replaced by robots and are outsourced? EDIT / UPDATE 5th November 2016: http://mashable.com/2016/11/05/elon-musk-universal-basic-income/ "There’s a pretty good chance we end up with a universal basic income, or something like that, due to automation" "I'm not sure what else one would ...


15

I'm going to give a less economically rigorous answer, and address your concern about your own situation. Jobs change. Your skillsets will always need to change. If you are young, it's a certainty that you will not be in the same job, or even the same career, your entire life. It's likely that many of the jobs you will do in life don't exist right now. ...


14

Neither the answer posited above nor the comment are off the mark. Inability to use monetary policy to adjust to a shock is certainly a cause of high unemployment in the aftermath. Idiotic fiscal policy doesn't help either. The very last thing to try to do after such a shock is to eliminate government deficits in such situations. It becomes a vicious -- ...


13

Isaac Sorkin, a grad student at Michigan, has addressed this. Here is Miles Kimball blogging it, Isaac Sorkin: Don't Be Too Reassured by Small Short-Run Effects of the Minimum Wage, Jonathan Meer and Jeremy West: Effects of the Minimum Wage on Employment Dynamics, and The Economist—Destination Unknown: Large Increases in the Minimum Wage Could Have Severe ...


13

I think your question has two parts: Is a labor union a cartel? Is a labor union therefore illegal? Let me give you the quick answer to both: 1) yes, 2) no. The longer version is the following: You are right, there is, from an economical point of view not that much of a difference between selling a good and labor, so a union could (and most times is) ...


11

Employment excludes non-salaried directors, volunteers, persons paid by commission only, and self employed persons such as consultants and contractors. The actively trading businesses with zero employees are therefore those businesses where the staff members are drawn exclusively from that group. That may cover most one-person outfits, perhaps some family ...


11

Contracts are a subset of all mechanisms where agreements are enforcable. An example of a mechanism that is not a contract: A second price auction (or Vickrey auction) is a truth-telling mechanism where the enforcability of contracts is not required. In the truth-telling equilibrium no one has any incentive to change their bid, no matter the outcome. This ...


10

In Labor Economics, "Extensive margin" refers to "how many people work". "Intensive margin" refers to "how much a given number of people work, on average". To copy from a freely available recent study by Blundell, Bozio and Laroque 2011, "...we split the overall level of work activity into the number of individuals in work and the intensity of work ...


10

I am surprised none of the posts above discuss the following paper: Autor, D., and M. Handel. "Putting Tasks to the Test: Human Capital." Job Tasks and Wages" Journal of Labor Economics (2009). This paper discusses your concerns and addresses why your concerns are quite well grounded in both theory and empirics. Tasks that are more routine do offer lower ...


10

No, this should not be a major issue. We will very carefully take into account the different sample sizes. Allow me to continue your example: Assume "Resume A" is the the treatment resume and "Resume B" is the control resume, where the treatment has a less advantaged ethnic name (Jamal, Beyonce) and the control resume contains a ...


9

To the extent that there is an economic explanation for their findings, it's something along the lines of costs of changing prices and employment are large enough relative to the increase in the minimum wage observed that producers choose instead to take a large amount of the cost of minimum wage increases on themselves. The alternatives would be 1) they ...


9

There's also Labor Economics by Pierre Cahuc, Stéphane Carcillo, and André Zylberberg. It's a broader labor econ book, but The "Unemployment and Inequality" fourth of the book covers these topics. I have not seen the second edition, but I expect that they did not alter that part for the worse.


9

To me, it seems that it has increased, not decreased, due to the factors you mention. Yes, transportation and information networks enable workforce movement. But they also enable movement of goods and information - and because goods and information are more mobile than humans, they profit more, and the results of their portability outpaces the results of the ...


9

This phenomenon is sometimes called "wage compression" because the range of wages is compressed by the minimum wage laws. One paper on this subject is The Impact of the Minimum Wage on Other Wages


9

Let's work such a very simple model. We have a Robinson Crusoe island economy, an isolated individual that lives totally alone. In order to consume something Crusoe must work. Assume for even more simplicity that capital is not needed (say, fruit-gathering by hand). Crusoe does not like to work but he would rather sit relaxed and enjoy the good weather in ...


9

Necessary Caveats When Discussing Slavery: First before tackling this question it is important to note that this issue is broad and complex. This is because there is no single 'slavery'. For example, slavery under the Roman Empire was not the same as slavery practiced in US south (see Tamin; 2017). Furthermore, even within a given society there might be ...


8

The way I see it, there are two possible futures given the increasing state of automation in the world. Future One: A Basic Income We decide as a nation, federal state, or world, that human beings are important in and of themselves. Every human receives an income from the state which enables them to support themselves, without any necessity for work in ...


8

Intentionally unserious answer. Let's just take the individual's possible reactions to "having their job taken over by a machine" and scale them up to the macro level. Find a job in another field. At the macro level that means a rapid societal reconfiguration. (Like Japan after WWII.) Imagine a Ruby On Rails web services test engineer going back in time ...


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