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Daren Acemoglu notes that demographic changes and the rise of AI and automation will result in profound changes in the US and global economies that could either benefit or hurt Americans.
https://www.nytimes.com/2024/10/17/opinion/economy-us-aging-work-force-ai.html
Daren Acemoglu notes that demographic changes and the rise of AI and automation will result in profound changes in the US and global economies that could either benefit or hurt Americans.
https://www.nytimes.com/2024/10/17/opinion/economy-us-aging-work-force-ai.html
Comments
His biggest concern is that the US isn’t investing enough in human capital to steer it towards the former.
I agree, but I would argue that the key is to ensure that workers’ wages rise in line with the increasing productivity caused by AI and automation.
If they do, it creates incentives for businesses and households to invest in the right sort of human capital in order to reduce individual wage costs. If they don’t, it won’t matter.
The history of the US until the 1970s shows that the self-reinforcing combination of strong domestic demand and high wages led to continuous productivity growth as businesses had strong incentives to invest in increasing the productivity of their...
workers, while households were rewarded for raising the quality of human capital. But once wages began to decline relative to productivity – in part because of a globalization that rewarded countries that became competitive mainly by preventing direct and indirect...
wages from growing in line with productivity – the need to invest in productivity-enhancing technology weakened.
We need to return to a system in which economies are rewarded, not penalized, for raising wages.