# Tag Info

63

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 ...

41

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 ...

31

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 ...

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, ...

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 ...

16

The short answer is No. Every single year, except 2009, for the past 55 years of continuously recorded economic history, the world has been getting richer. The -2.1% global recession in 2009 was made up in 2010 with 4.1% growth. I was just working with the World Bank's World Development Indicators, which track global GDP growth, and I double checked. We ...

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. ...

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

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 ...

7

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 ...

7

In Progress and Poverty, Henry George claims that the advancement of technology eventually leads to increasing the land value and the land rent. This means that people who own land will have a high income, whether or not they work, while people without land will have to pay most of their free income to the landlords as rent.

7

There is a scientific tradition of decades that occupies itself with the measurement/estimation of the productivity/efficiency of firms. The three strands of the literature are Data Envelopment Analysis (DEA), Discriminant Analysis (DA), and Stochastic Frontier Analysis (SFA). I am familiar with the third one. Stochastic Frontier Analysis starts with the ...

5

I would like to start by saying that I'm not a programmer and I have never contributed to any open source project. However, I have been interested in open source for a long time and I believe that I understand the general concepts of open source and how it works. To start of, I would like to say that open source does not mean that you cannot make money on ...

4

"Well, the basic issue is the entitlements and the reason it's a problem is that people put money in their own funds and their employers' funds plus interest and that is what they perceive they et back , and therefore they are entitled to it because it is their money." He's saying people think that they receive the income that they are putting into ...

4

Once artificial intelligence surpasses human intelligence, it will be up to A.I. to determine how we spend our days. On the one hand this already occurs. When you go online, algorithms are constantly trying to put you into so-called funnels of a variety of business models. Whether it is to click on ads, pay for digital products or order services and goods, ...

4

Keep this in mind. The richest 1% aren't cannibals. What I mean by this is that the richest 1% have become the richest by getting their product(s) to the populous. If the populous can't afford a product, then there is no motivation to invest the capital required to create the product. The product will exist as a wish until some young enterprising soul ...

4

I think it's too early to identify econometrically an effect of Trump in the economy. Recall that the election was the 8th of November, and his victory came partly as a surprise. He took some time to define his cabinet and got into office the 22nd of January. Thus, any effect of a Trump's "dummy" might only partially be reflected in data for Q4 of 2016, and ...

4

The word rent has a general meaning, and a specific technical meaning within economics. As the article you've linked to states explicitly: Rent-seeking occurs when an individual or business attempts to make money from its resources without using those resources to benefit to society or generate wealth It should be obvious that when an apartment is ...

3

The closest study I could find was that by John Pencavel titled 'The Productivity of Working Hours.' Abstract: Observations on munition workers, most of them women, are organized to examine the relationship between their output and their working hours. The relationship is nonlinear: below an hours threshold, output is proportional to hours; above a ...

3

The distinction between land and physical capital is based on some of their economic properties, particularly relating to investment: whether it can be reproduced or not; whether it has a finite lifetime (compared to the human lifetime). Almost all land is not reproducible, and does not have a finite lifetime. Physical capital is reproducible, and does ...

3

The biggest issue (in the US national accounts, at least) is the fact that government production is recorded on a cost basis rather than a market value of output basis (due to the lack of market values for many government services). From the NIPA Primer, pages 2-3: GDP is composed of goods and services that are produced for sale in the “market”—the ...

3

On a lighter note,...... Robots do not eat, drink, buy consumer goods or take their date to the movies. Who is going to buy the goods that the robots produce if all the workforce is out of a job. Do not be afraid of Technology, the economic equilibrium will balance itself out eventually. It's the greedy/powerful people you need to worry about.

3

The only "perpetual motion machine" is life itself. No it is not. We also convert energy to heat as we go through life. We are certainly not immune to the second law of thermodynamics, we increase entropy all the time. Machines cannot run or reproduce themselves. Why not? There is already factory robots making other robots. But of course, they run on ...

3

Since you say holding other variables as they were and double $L(t)$ I assume you have a production function that may include capital $(K(t))$, including this and assuming a Cobb-Douglas production function: $$Y(K(t), L(t)) = K(t)^{\alpha} L(t)^{1-\alpha} \; \; 0< \alpha < 1$$ Doubling $L(t)$ gives, (and omitting $t$ from the writing for clarity): ...

3

Here is one explanation, albeit focusing on the wider economy, and comparing median wages. Still the method applies: This is taken from Bivens and Mishel (2015). In essence, they decompose labour productivity into its different components (see technical appendix, page 25). These components are three: Labour share: how much of total product (they use Net ...

3

Output per capita is $\dfrac{Y}{N}$. This can be decomposed as: $$\frac{Y}{N} \equiv \frac{Y}{h} \times \frac{h}{L} \times \frac{L}{A} \times\frac{A}{N}$$ where $h$ are aggregate hours of work, $L$ is number of employed, and $A$ is active population. $\frac{Y}{h}$ is aggregate labour productivity, $\frac{h}{L}$ is "work intensity", $\frac{L}{A}$ is the ...

3

Credit or more broadly finance helps to allocate scarce resources to where they are most needed. Example. Suppose party A is sitting on a pile of resources from which he thinks he can make a return of 1% (per annum). Party B has no resources, but thinks she can use party A's resources to make a return of 3%. Then both parties can benefit if A loans his ...

Only top voted, non community-wiki answers of a minimum length are eligible