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Here is a mystery: Why does the share of workers in total economic output decline? If you think this has always happened or the answer is obvious, you are wrong. On the contrary, during the almost two centuries of booms, crises, wars and technological revolutions, the share of GDP devoted to the labor force has remained remarkably constant (about 65% in the United States). This discovery, when it was discovered for the first time several decades ago, surprised everyone. British economist John Maynard Keynes called the phenomenon a "miracle". Nevertheless, it was a fact, the remuneration of the workers increased with the GDP.
But of course, this is not the case. From the 1980s, worldwide, the share of labor began to decline slowly. In 2000, he began to fall quickly. In the United States, the share of labor now represents 56% of annual income, which represents for the average household an annual income lower from about $ 11,000 to a share of 65%. The decline was even more marked in some countries, particularly in Germany, and also in developing economies, notably China, India and Mexico.
So what's going on? The main suspect is technology, but the cause-and-effect relationship is not as obvious as it may seem. After all, the technological advances of the 19th century have been revolutionary and have greatly improved the standard of living. What has changed over the past 30 years in the relationship between technology and heritage distribution?
Recent research by Daron Acemoglu of MIT and Pascual Restrepo of Boston University describes a revealing new way of badyzing the effects of technology on workers. Automation always eliminates jobs, they note, and technology also creates new jobs; The machines moved many agricultural workers in the 19th century, but also created millions of new jobs in the manufacturing sector, for example. This may be common knowledge, but the complete figures on the tasks eliminated and created by the technology were not readily available.
The researchers then made heavy calculations and found them. "Look at the 40 years after World War II," says Acemoglu, referring to a period when the share of the workforce was still holding. "There was a lot of automation [that eliminated tasks] but also not bad to introduce new tasks – they were almost identical. "(Think of all the new jobs in services, which have become a much larger part of the US economy in the 1950s and 1960s.)" Last 30 years – automation is a little faster, but the introduction of new tasks becomes very, very slow. This is the great discovery. "
It's also the mystery. The significant implication of this research: for the first time in modern history, automation is not necessarily good for all workers. "Our evidence and our conceptual approach" do not support "the presumption that technological change will always and everywhere be good for work," write Acemoglu and Restrepo. "If productivity growth continues to drive automation, the relative position of the workforce will diminish."
Again, why? For non-economists who observe the world around us, it is hard not to conclude that the global explanation implies a growing power of technology, a combination of Moore's Law, advanced algorithms and universal connectivity , all at a constant lower cost. Perhaps the technology has exceeded a certain threshold in relation to human capabilities. If this were the case, capital would not increase the work with technology, as it has always done, but would sometimes have an interest in replacing it completely. The number of non-automatiable tasks, existing or unimaginable, would decrease. Daniel Susskind, from Oxford University, proposed an economic model based on a new type of capital, called "advanced capital," that moves only work. His model leads to a scenario in which "wages fall to zero".
Virtually no other researchers are ready to go. But the increasingly widespread view – that technology can always improve the lot of workers, but not necessarily – reflects a radical change in the way automation affects work. This requires new badumptions from companies, government leaders, investors and workers. This suggests that voters can demand a public policy that controls the effect of technology on workers, as technology can not be relied upon to improve the overall well-being of workers.
At a conference in 2013, Lawrence Summers, former Treasury Secretary, said, "This set of developments will be the defining economic trait of our time." This is becoming more common every day. A major social realignment is in its infancy. Prepare for the tumult.
A version of this article was published in the July 2019 issue of Fortune with the title "The Shifting Fortunes of Automation."
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