3 ms·
Technically there is one other outcome of increased automation without labor income increases - price drops of goods. It is inferior to a rise in consumer good
by Nasrudith 7y ago
Technically there is one other outcome of increased automation without labor income increases - price drops of goods.
It is inferior to a rise in consumer goods in a few ways - less incentive to automate especially if there is little competition. However the lossiness of defection prisoner's dilemma works in the consumer's favor for once.
If one automates and takes lower margins then they gain market share but shrink the market cap. If multiple automate and scale up then it leads to even lower margins.
This approach does lead to more accessible goods however than an "inflated" higher income for workers norm but also devalues competition from the third world - China produces clothes even for Sub-Saharan Africa and Haiti as it is cheaper than even their labor in areas where there is less money to be made transporting goods and materials.