67 votes

How will non-rich citizens make a living if jobs keep getting replaced by robots and are outsourced?

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 ...
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46 votes

How will non-rich citizens make a living if jobs keep getting replaced by robots and are outsourced?

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 ...
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39 votes
Accepted

What has caused the recent 25% unemployment rate in Spain?

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 ...
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32 votes
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Does recycling lead to fewer jobs?

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 ...
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  • 2,754
27 votes

How will non-rich citizens make a living if jobs keep getting replaced by robots and are outsourced?

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". ...
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  • 6,662
26 votes
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Why do wages not equalize across space?

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 ...
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23 votes

How will non-rich citizens make a living if jobs keep getting replaced by robots and are outsourced?

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 ...
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  • 386
22 votes
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Why is collective bargaining by a group of employees not the same thing as price-fixing?

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....
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22 votes
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Why are real median household incomes stagnant?

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 ...
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21 votes

Why do wages not equalize across space?

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 ...
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19 votes

How will non-rich citizens make a living if jobs keep getting replaced by robots and are outsourced?

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 ...
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16 votes

How do Marxist economists solve the Diamond-Water Paradox?

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 ...
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15 votes

How will non-rich citizens make a living if jobs keep getting replaced by robots and are outsourced?

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/ ...
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15 votes

How will non-rich citizens make a living if jobs keep getting replaced by robots and are outsourced?

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 ...
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14 votes

What has caused the recent 25% unemployment rate in Spain?

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 ...
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13 votes

Unemployment and the Minimum Wage---what are the main counter-arguments to Card and Krueger?

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 ...
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  • 2,167
13 votes

Why is collective bargaining by a group of employees not the same thing as price-fixing?

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: ...
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12 votes

What is the difference between intensive margin and extensive margin in labor economics?

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 ...
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12 votes

What is the difference between contract theory and mechanism design?

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 ...
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11 votes
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Why is the percentage of Australian businesses that don't have any employees so high?

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 ...
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  • 7,992
10 votes

Unemployment and the Minimum Wage---what are the main counter-arguments to Card and Krueger?

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 ...
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  • 1,996
10 votes

How will non-rich citizens make a living if jobs keep getting replaced by robots and are outsourced?

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 ...
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9 votes

Graduate Level Textbook on Labor Economics and Macro-Labor

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 ...
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  • 1,105
9 votes
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Has the natural rate of unemployment decreased with modern travel and the Internet?

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 ...
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  • 244
9 votes
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Effect of minimum wage on higher levels of pay

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
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9 votes
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Why has increased productivity over the last 100 years not affected how much people work?

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 ...
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9 votes

What determines whether slavery is economically efficient in industrialized/modern era economies?

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, ...
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9 votes

Field experiments on labour market discrimination: do sizes of randomly assigned groups matter?

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 ...
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8 votes
Accepted

Whatever happened to efficiency wage theories?

I don't believe that Search Unemployment (MP) actually "won" over efficiency wages. The whole discussion of search literature would be too long for this post, so I'll just skim the most important ...
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8 votes

How will non-rich citizens make a living if jobs keep getting replaced by robots and are outsourced?

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 ...
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