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From the paper: Proposition 1. The growing use of AI, ceteris paribus, reduces wage inequality between high-skill and low-skill workers, as long as AI is mor

From the paper: Proposition 1. The growing use of AI, ceteris paribus, reduces wage inequality between high-skill and low-skill workers, as long as AI is more substitutable for high-skill workers than low-skill workers are for high-skill workers. This makes sense within the confines of the model and assumptions. But: - perhaps AI is less like industrial automation (which substitutes for labour) and more like assembly line machinery (which complements labour) - the static 'low skill' / 'high skill' divide assumed by the model, seems like a major limitation; it doesn't allow for the idea that AI will split the 'high skill' group into two groups: those who can be mostly replaced with AI, and those who can do stuff AI isn't good at yet. Either of these alone (or both together) would suggest increased wage inequality.

kevindamm 2y ago
It also only addresses the substitution of high skill labor as it pertains to generating text/image/etc. and not the assessment nor integration of that output. It's been my experience that GPT can help with the generation and can try to help with the assessment. But it is not consistent on assessment and is very lacking in integration of the output. This varies some based on the task and the kind of high skill being considered. Generating copy or stock images? Re-rolling is easy enough and integration is already heavily assisted by existing tooling. Writing business logic for a low risk backend system? Integration is a little harder but overall I could see it lifting a low skilled worker to nearer high skill. Designing a large system with many moving parts? Prepare to re-ask your questions a lot and your assessment skills had better be already in the high-skill area for that task, I wouldn't trust GPTs beyond a certain scale or complexity. I think that we'll see a lot more solopreneurs and we'll see people use it to help learning things that they would have otherwise thought were beyond them. And the bifurcation of high skill workers will be more about those who use it in their work and those who can't or don't. But I'm not as confident as this article is about high skill jobs like programming entirely replaced by GPTs.
worstspotgain 2y ago
>> perhaps AI is less like industrial automation (which substitutes for labour) and more like assembly line machinery (which complements labour) These are really rather similar from a bird's eye view. In the second case, you complement labor and increase the productivity of an individual worker. However, in relative terms, you reduce the number of workers employed and/or increase the amount of capital used. This marginally decreases wages and increases returns to capital. Once the dust settles - the famous "long run" - you've increased the size of the economy by increasing productivity. This results in a slightly higher wage and a relatively even higher increase in the capital rate of return, thus increasing inequality. But then - in the even longer run - the capital stock grows faster than population, so you get the opposite trend. Capital becomes relatively more plentiful, favoring more capital-intensive production functions. This helps wages on the teeter totter. I think the most obvious changes are going to be the increases in the relative wages (and social prestige) of jobs that are neither low-skilled nor AI-augmentable, i.e. the "stuff AI isn't good at" and might never be. An illustrative edge case might be masseur/masseuse.
- meiraleal 2y ago
  > An illustrative edge case might be masseur/masseuse. Isn't this one being replaced by massage chairs for many years now? My guess is that personal trainers and martial arts masters will be safe for the longest.

kevindamm 2y ago

It also only addresses the substitution of high skill labor as it pertains to generating text/image/etc. and not the assessment nor integration of that output. It's been my experience that GPT can help with the generation and can try to help with the assessment. But it is not consistent on assessment and is very lacking in integration of the output. This varies some based on the task and the kind of high skill being considered. Generating copy or stock images? Re-rolling is easy enough and integration is already heavily assisted by existing tooling. Writing business logic for a low risk backend system? Integration is a little harder but overall I could see it lifting a low skilled worker to nearer high skill. Designing a large system with many moving parts? Prepare to re-ask your questions a lot and your assessment skills had better be already in the high-skill area for that task, I wouldn't trust GPTs beyond a certain scale or complexity. I think that we'll see a lot more solopreneurs and we'll see people use it to help learning things that they would have otherwise thought were beyond them. And the bifurcation of high skill workers will be more about those who use it in their work and those who can't or don't. But I'm not as confident as this article is about high skill jobs like programming entirely replaced by GPTs.

worstspotgain 2y ago

>> perhaps AI is less like industrial automation (which substitutes for labour) and more like assembly line machinery (which complements labour) These are really rather similar from a bird's eye view. In the second case, you complement labor and increase the productivity of an individual worker. However, in relative terms, you reduce the number of workers employed and/or increase the amount of capital used. This marginally decreases wages and increases returns to capital. Once the dust settles - the famous "long run" - you've increased the size of the economy by increasing productivity. This results in a slightly higher wage and a relatively even higher increase in the capital rate of return, thus increasing inequality. But then - in the even longer run - the capital stock grows faster than population, so you get the opposite trend. Capital becomes relatively more plentiful, favoring more capital-intensive production functions. This helps wages on the teeter totter. I think the most obvious changes are going to be the increases in the relative wages (and social prestige) of jobs that are neither low-skilled nor AI-augmentable, i.e. the "stuff AI isn't good at" and might never be. An illustrative edge case might be masseur/masseuse.

meiraleal 2y ago
> An illustrative edge case might be masseur/masseuse. Isn't this one being replaced by massage chairs for many years now? My guess is that personal trainers and martial arts masters will be safe for the longest.