62

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 ...


40

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 ...


30

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 ...


23

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 ...


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 ...


21

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, ...


19

I find your question very interesting. 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 ...


17

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

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

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

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. ...


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) ...


12

Isaac Sorkin, a grad student at Michigan, has addressed this. Here is Miles Kimball blogging it, link. Main argument there is that previous work measures short run elasticities, which are less responsive than in the long run. You can surely find more by checking Sorkin's citations.


12

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 ...


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 ...


10

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

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

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 ...


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

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 ...


8

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.


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

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 ...


8

You seem to be looking for the phrase 'wage share' or 'share of labour compensation'. Wage share: The wage share (or labor share) is the ratio between compensation of employees (according to the system of National accounts) and one of the following variables: gross domestic product at market prices gross domestic product at factor cost net ...


8

A very famous study in this direction is Card and Krueger (1994). They look an increase in the minimum wage in New Jersey in 1992. While New Jersey raised the minimum wage from USD 4.25/h to USD 5.05/h, the minimum wages remained at $4.25 in adjacent Pennsylvania. You should have a look at the subsequent research.


8

It is worth noting that OP's original question before I edited it asked, "why would economists lie to us?" This already leaves a poor taste in my mouth; such a question is loaded enough as it is, only good for picking fights. The author stated at the bottom of the Progressive Dairy article is a lawyer, not an economist, and seems to be the basis for some of ...


8

The 40-week comes started with the movement of the 8h working day. The wikipedia article makes a quick summary of the historical progress of thinking from 12h work days in Britain during the industrial revolution to the nowadays 8h/day. The quick summary is that after the first world war, the International Labour Organization (ILO) was formed and its first ...


7

Kroft and Pope (working paper, published in JoLE 2014) ask exactly this question, and their tentative answer is "no". They view Craigslist as a unique opportunity to study the benefits of online job sites, since it grew rapidly and somewhat idiosyncratically while other popular sites grew steadily (leaving few opportunities for identification). That said, ...


7

First, we need to assume that the minimum wage is an "effective constraint", i.e. that in the cases examined people are paid the minimum wage. I guess this holds. Second, the negative relation between demand for labor (for the services sold by workers) and wage (its price), depends on an assumption of a smooth such relation. In turn, such a smooth relation ...


7

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 parts. (i) As a first, Shimer (2005) discusses that the MP model actually fails to get employment (market tightness) volatility right (ii) In the same AER issue, ...


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