7 ms·

Why AC is cheap, but AC repair is a luxury

137 points by walterbell 1y ago

arjie 1y ago
One interesting consequence of this is that your opportunity cost is now highest it's ever been. By choosing to post on Hacker News instead of spending my time better (perhaps even as simply as watching my daughter sleep) I am wasting more value than ever before. In days past, you were substituting something mindless for this. Today, by not spending your time with your family, or reading, or on your hobby or relaxing you are paying an ever more valuable slice of time on addictive social media like this.
harikb 1y ago
There is a simpler explanation - HVAC jobs are directly influenced by the push to covert everything to heat-pumps. And good heat-pumps are expensive. So when you install a $15K to $25K, installation fee also goes up. I am surprised Solar isn't up there. Panels are cheap, install is what we pay for 10 years+
- cake-rusk 1y ago
  An AC is a heat pump too.
  - bhhaskin 1y ago
    A Heat pump is just AC with more valves.
  - korhojoa 1y ago
    I don't know what the deal is about people saying heat pumps are expensive. They used to be a little pricier than AC units, but it's just a 4-way valve in addition to one. I just looked it up, and I can buy a heat pump for 200-400 euros (depending on desired output), installation is ~400 euros. Why are you paying 20-30x for something identical? This sounds like a price difference created by government behavior, like with solar panels and related hardware which seem to be significantly overpriced in north america.
    - danans 1y ago
      > This sounds like a price difference created by government behavior It's a price difference created by market segmentation of heat pumps as a luxury product in the US, and the relative lack of qualified installers due to our under-investment in education in the trades.
    - Gigachad 1y ago
      Is this some country specific terminology? At least in Australia I've never seen an air conditioner that didn't use heat pump technology. Aside from evaporative cooling that is.
      - kelnos 1y ago
        Air conditioners (the things that can make a room colder, but not hotter), are indeed heat pumps, but in the US when we refer to a "heat pump" we mean the same technology, but with a reversing valve so that it can make rooms both colder and hotter.
        Gigachad 1y ago
        Interesting. I’ve never seen one that couldn’t heat and cool before. Even crusty 30 year old window units can do both. Seems almost absurd to not utilise it both ways.
    - numpad0 1y ago
      You have to specifically look for cooling only AC where I am. Most ACs come with heat-dehumidify-cool mode selection and therefore qualify as "heat pumps", as far as how the term is used. I think it's just quirks of regions that traditionally didn't have ACs by default.
- bradlys 1y ago
  It's not even that. It's that rich people are the only thing the trades are catering to now. https://www.youtube.com/watch?v=qT_uSJVCYds https://www.youtube.com/watch?v=qT_uSJVCYds Example of a solar install that was under $20k via DIY - maybe took this guy 1-2 weeks of full-time work. But he was quoted $90k and he did most of it himself - only hiring a backhoe operator to move some dirt around. We're at the point where the trades are only going to cater to rich/desperate people because the margin they'd make on a job that is DIY-able (and charged a fair price) is not worth it to them. Why do 5-6 low margin jobs when you can do 1 high margin (rip-off) job? Your only competition out there is someone with the will to do it. Builders in CA are massive ripoffs as well. I think the only way you bring costs from trades down is by having all your workers in-house - which is only doable for corporations. Your average homeowner is just fucked and is gonna have to youtube everything.
  - hexbin010 1y ago
    > It's that rich people are the only thing the trades are catering to now. This is my gut feeling too. I've known so many rich people who just accept whatever number a tradesperson quotes. There is no way that hasn't had a mass effect
    - quadrifoliate 1y ago
      I'm not rich (or at least, don't feel rich with the enormous cost increases on everything combined with no promotions for 3 years) -- but how do you negotiate with a tradesperson exactly? All of the major trade companies around where I live (HVAC, plumbing, electrical etc.) in the US have rates that they quote before the person will even show up. As a new homeowner who didn't grow up in the US, that's all I've ever dealt with. If the answer is “Give them a number you're comfortable with, and just DIY it as an alternative” -- that's fine, and I do it for anything simple; but for the remaining ones, I have already made a determination that learning this skill would be way more in terms of time invested than the $500 or whatever absurd number they are quoting for a simple repair (this logic likely breaks down over time, and I'm trying to invest more time into learning more house repairs). I have tried pre-purchasing some parts in the past; and asking them to use them for the install -- that one had some success and a guy told me how much his company marks up parts (n00%). I do try to get multiple quotes for something, but the difference between them isn't usually appreciable; they're all absurdly high. I've tried to ask them for a parts v/s labor breakdown in the past; some won't even provide that.
- turtlebits 1y ago
  Good mini splits aren't expensive. They're expensive because HVAC installers are fleecing US consumers. A majority of mini splits are made in China and are inexpensive and reliable because they're so pervasive in Asia. Most are rebadged Midea or Gree. You can get a decent mini split for <1.5K and install it yourself for $200 in tools.
  - jonway 1y ago
    It is expensive, but I think you're underestimating the costs. If the AC catches fire because your electrician skills are bad, what happens? I guess you can rent a ladder if you need one, but they're at least $200 if your split is on the second floor and ladders can be deceptively tricky, and load ratings must be considered. Condensation can kill you and be an extreme cost with mold. Your first mini split is going to take a real long time to install, I promise, assuming you size it right. There is a non trivial risk to life and limb. This is one of those "Reality has a surprising amount of detail" things.
    - trollbridge 1y ago
      Catches fire? The amount of electrical work with installing a minisplit is minimal. And HVAC technicians are not electricians, either. The skill involved is that of tightening screws on screw terminals.
      - jonway 1y ago
        You're gonna plug it into the outlet? its going to probably need a circuit at the breaker.
    - turtlebits 1y ago
      If you're not comfortable with the electrical work, hire an electrician. Of course don't DIY it if you're not comfortable, but a simple exterior wall install is fairly straightforward. On a second floor install, (with the condenser on the ground) you only need a small egress hole you can drill from the interior. You'd need a ladder just to secure/cover the lineset.
userbinator 1y ago
Fortunately the massive amount of information available online, continued search-engine-degradation notwithstanding, often means finding out how to do many things yourself is much easier and cheaper than hiring someone else to do it.
chemotaxis 1y ago
That's a lot of economic theorizing, but to me, it doesn't seem to be substantiated all that well. You can just as well argue that labor is getting more expensive in the West because of two non-market pressures. First, we have a multitude of government programs that seek to eliminate extreme poverty, so there are fewer people who are desperate to take any job for any money. Second, you have consumer protection policies that make it genuinely expensive to, say, be a HVAC repairman. Educational requirements, permits, licensing, business insurance, waste disposal, etc. On my neighborhood Facebook group, every time someone asks for recommendations for menial, minimally-skilled backyard labor, they always insist the person needs to be licensed, bonded, and insured. And then, they're surprised that it costs $10,000 to paint a fence.
- WarOnPrivacy 1y ago
  > First, we have a multitude of government programs that seek to eliminate extreme poverty, Clarification: In some places we absolutely do. In others we absolutely do not. > so there are fewer people who are desperate to take any job for any money. I think is is better reflective: There is huge surplus of employers have that set up systems that insure they do not hire qualified people. Job portals that auto-trash applications from unwanted applicants (1st time, most minimal of crim rec, wrong zip codes) are one massive example. source: me+kids spent a decade in red state, hunger-level poverty. kids who got zero replies during months/years of entry level job apps.
- aeonfox 1y ago
  > eliminate extreme poverty, so there are fewer people who are desperate to take any job for any money One way to eliminate extreme poverty and increase skilled labour, is to ensure children have enough nutrition, health, schooling, and funds to pursue skilled worked in adult life, which usually involves making time outside of work, adequate health, some prerequisite education, and a sufficient financial buffer to actually upskill. A second thing is Baumol's Cost Disease. If there are other industries that are more rewarding that require less effort, no-one is going to pursue those options. Why be a clever guy who makes a product (or becomes a HVAC repairer, electrician, etc.) when you can get a comfy job at a FAANG (or whatever the acronym is today). You could sub in benefits here, but I don't think people are thriving on benefits in the US. But I'm an outsider, so I wouldn't know. But there's also a secret third thing that people don't often consider, which is the culture. If there's a culture that doesn't privilege working hard, or educational attainment, etc., people won't seek those things.
magicalhippo 1y ago
Just had our minisplit develop a leak after 7 years. The shop recommended replacing it, as just the refrigerant is half the price of a new one if most has to be replaced, due to environmental taxes. Basically a repair is guaranteed to be at least 50% of new price of NOK 23k ($2.3k) installed and can quickly approach 80+% if the guy has to spend time on it. That made me wonder how on earth they make money on selling these things. And how effective that tax was, given it's pushing us to replace a unit that's probably fine for many more years with just a bit of TLC. edit: fixed pricing brain fart
- tass 1y ago
  23k seems like a lot, especially so if the leak is somewhere other than a hidden part of the line. Equipment cost is likely only a couple of k, and labour to replace without running new lines is maybe a few hours. Please get a second opinion, especially if you can find a non-shop to give you one.
  - magicalhippo 1y ago
    > 23k seems like a lot, That is because it's wrong. Sorry, just woke up. I'm in Norway, and it's 23k NOK, or $2300. The shop said filling my system back up with refrigerant if it was empty would be around $1.3k, and based on what I've heard I don't think that's off by much.
    - tass 1y ago
      Oh I don’t know how I missed that unless you made an edit, but I also just woke up :) This price makes more sense. 23k didn’t sound too far off what an American installer would try charge for a new system in a high cost of living area, so this wasn’t too unbelievable.
      - magicalhippo 1y ago
        Yeah edited it, should have clarified. > 23k didn’t sound too far off what an American installer would try charge for a new system in a high cost of living area I've heard these insane prices. I think 2.3k is pricey enough, you can get cheaper units here but SO wants the pretty indoor unit so pretty indoor unit she gets.
confirmmesenpai 1y ago
how expensive is AC repair in Hong Kong?
- trollbridge 1y ago
  Since AI is the future, here is what AI says (which is basically sourced from a couple Reddit posts): "The cost to repair an AC in Hong Kong varies by the problem, but basic repairs can range from approximately HKD $500 to $1,000, while major repairs like a compressor or refrigerant leak can cost HKD $1,500 to $4,000 or more. Inspection fees are often around HKD $500, with the repair costs and any needed parts being quoted separately. " Basic repair US$64 - $129 Major repair $193 - $515 Inspection $64 Somehow, American HVAC prices are orders of magnitude higher than that.
mlsu 1y ago
Lots of people do all kinds of things that are not explicitly written down at their jobs. Those things cannot be tokenized, they cannot be taken in by AI no matter how intelligent and sophisticated it gets. They are judgement calls, made by real people, who think harder and bring more to the table than any machine, no matter how many FLOPS. But, nonetheless, those jobs will probably disappear, and the machine will reorganize itself to maximize its self-legibility, making tons more money but becoming yet more shitty and inhumane in the process. Discarding the whole reason the jobs exist in the first place (stuff like Value and Service — oh excuse me, sorry, meaningless cost centers to be optimized). Sort of like how Radiologists do all kinds of important shit, that gets entirely hand waved away in this think-piece as 99% automatable. Yeah, sure guys, the radiologist — actual doctors for fucks sake — I’m sure he is nothing but a warm body between the patient and the computer, signing paperwork and collecting cheques.
nl 1y ago
This is a very interesting piece. I'd never heard of "Baumol’s Cost Disease" but I think the thing it is appliesd to most often here in Australia is coffee. Everyone complains that it is $7 for a cup of coffee, and yet demand for barrista coffee keeps increasing and demand for barristas keeps increasing.
csours 1y ago
Classic Paradox of Automation - As automation gets better, two things happen: Cost of goods goes down - think factory automation improving line rate. There is less human intervention, but that intervention requires more expertise.
seemaze 1y ago
How are ‘new cars’ and ‘cell phone services’ considered ‘unregulated’?
rablackburn 1y ago
> We are at the point in the technology curve with AI where every day someone figures out something new to do with them, meaning users will take any chip they can get, and use it productively. Sure, that's an assertion. But (with just as many citations), mine would be: This boom is absolutely, 100%, fueled by the combined factors of: 1) employees outsourcing the cognitive load of their jobs to models that are, impressively "close", but not quite _as_ good as a well-trained human. ie, we're replacing google with a fun, but terribly energy-wasteful (and _very often_ factually wrong) "make up an answer" tech. and 2), AI "app developers" who are having fun with the previously "impossible" (*cf. https://xkcd.com/1425/ https://xkcd.com/1425/) APIs of multi-modal natural language, and "didn't sci-fi warn us about this?" simulations. Neither of which are good for productivity, if we measure productivity as "improving circumstances for the mutual commonwealth of all life". Which is the goal. * oh, I _did_ use a citation after all. It is an interesting article, but _far_ too sure of itself in all the wrong areas.
bcrosby95 1y ago
> HVAC wage This is mostly down to people being afraid of anything even remotely trades-like. Learn to do some basic home repair, it will save you thousands. > This graph can mean different things to different people: it can mean “what’s regulated versus what isn’t” to some, “where technology makes a difference” Cars are pretty heavily regulated... What I see is what is necessary to live and what isn't. Elastic vs inelastic demand. > the average American middle-class household can comfortably manage a new car lease every two years Huh, no, the average American middle-class household cannot do this. > If one sector becomes hugely productive, and creates tons of well-paying jobs, then every other sector’s wages eventually have to rise, in order for their jobs to remain attractive for anyone. I'm sorry, but anyone who has lived in the lower income brackets knows this just isn't true. This is hard to read. Whoever wrote this is extremely out of touch and thinks they're eminently intelligent. It reminds me of the "smug San Francisco" South Park episode. The world is going down a road of hurt and you've got elites who are so busy "winning" over the past 50 years running around sniffing their own farts.
- Daz912 1y ago
  >This is hard to read. Whoever wrote this is extremely out of touch and thinks they're eminently intelligent. That’s funny I thought the exact same thing reading your comment.
- kelnos 1y ago
  > This is mostly down to people being afraid of anything even remotely trades-like. Learn to do some basic home repair, it will save you thousands. Installing a new HVAC system is not "basic home repair". Yes, there are HVAC-related repairs that qualify as basic, but we're also talking about the big things. And while yes, many homeowners could learn how to install a new heat pump, run refrigerant lines, make sure every connection is torqued properly, etc., most would not want to or have the time to do so, and that's fine, normal, and expected.
Gigachad 1y ago
This was pretty interesting. But the part I didn't get is where its stated that things got more expensive, but we consume more of them because we got richer. Is this not just inflation? If everyone got paid more and everything got more expensive, are we not essentially level?
- FloorEgg 1y ago
  It seems maybe you mixed up non-fungible value-bottlenecking human services with "everything". Many things can get cheaper, some things get more expensive, and median person gets more wealthy and buys more of both. In reality, yes, inflation plays a role in this, but the article is pointing to other patterns layered on top of it. On average, over long term, despite inflation, people can afford way more good and services.
deleted 1y ago
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ggm 1y ago
The inflation in health care cost is not down to Jevons in my opinion. The likelihood of AI job displacement is low because the demand backlog is high. Robotics will reduce back injury rates and so reduce Nurse shortages, for example. Misdiagnosis rates cause increases in compensation claims so improvement in diagnostics reduce risk so insurance premiums(for hospitals) should go down or at least not rise as quickly compared to inflation. Note that the cost of health is high even in the economies without the broken US health system, and we have the baby boom moving through which is a huge bubble of cost associated with age. Not that there's no component of Jevons in this, but it doesn't explain everything. A thing said to me in Argentina resonated: They pay doctors, nurses, pharmacists slightly more if they will do out-calls to elderly people in the community at large. The increase in staff cost to have home calls offsets the massive increase in care costs if these people cannot be cared for in their home and move into a managed care facility. It's partly an externality if you privatise healthcare: who cares if the state has to pick up the tab, right? But in a more integrated view of the costs here, its better to pay more for people to help keep the elderly in their own home as long as possible. (elderly, intending to stay in my own home, not in the US health system)
zeroonetwothree 1y ago
I'm not sure why everyone picks on radiology as the 'obvious' field that will get automated. So far it has been the opposite: > In 2025, American diagnostic radiology residency programs offered a record 1,208 positions across all radiology specialties, a four percent increase from 2024, and the field’s vacancy rates are at all-time highs. In 2025, radiology was the second-highest-paid medical specialty in the country, with an average income of $520,000, over 48 percent higher than the average salary in 2015. Simply put, radiologists do a lot more than merely read scans: > Radiologists are useful for more than reading scans; a study that followed staff radiologists in three different hospitals in 2012 found that only 36 percent of their time was dedicated to direct image interpretation. Source: https://worksinprogress.co/issue/the-algorithm-will-see-you-now/ https://worksinprogress.co/issue/the-algorithm-will-see-you-...
- zeroonetwothree 1y ago
  In a similar vein, studies have found that software engineers spend only ~30% of their time coding on average. Yet we're similarly meant to believe that AI is going to replace human engineers? Ironically this belief is often held by software engineers themselves, as if they don't realize that they do so much more than generate characters. Bizarre.
  - big-and-small 1y ago
    With this attitude you'll never get investments...
- trollbridge 1y ago
  A radiologist read my brother-in-law's MRI and contacted him and told him to go directly to the ER and actually wrote up a referral to have him immediately admitted. This happened in the middle of the night since the radiologist was reading them on the night shift. He was admitted and operated on two days later (as he had to be prepared for surgery and have additional pre-op testing done). No AI replacement is going to be doing that anytime soon.
  - 1y ago
blueblisters 1y ago
There is probably an equivalent of Amdahl's law for GDP - overall productivity will be bottlenecked by the least productive sectors. Until AI becomes physically embodied, that would mean all high-mix, low-volume physical labor is likely going to become a lot more valuable in the mid-term.
AngryData 1y ago
The problem isn't tradework costing more, the problem is most people making less money thanks to wage stagnation and can't afford reasonable trade rates. Capital costs for the neccessary tools are also higher than ever. I can build a house 4x faster today than my father could back in the day, or alternatively with 4x less labor, and yet he could buy a house, 2 cars, and support 3 kids on his single wage. Meanwhile I struggle to do more than just survive in my little shack house built from scrap on an empty plot doing the same thing. The only jobs that earn me a decent wage is for corporations or for people near or in the top 1% of wage earners. If the average person made more money I would have more work and more money. But as it is a lot of residential work would be of negative value to me at the prices people can afford, and with less work to do and farther and farther travel distances for it my prices must keep rising to stay solvent.
- jillesvangurp 1y ago
  It's rules and legislation. The job of banging together reasonably serviceable form of shelter isn't that expensive. It's only expensive if you have to jump through a lot of hoops to use certified designs, materials, etc. deal with inspections, use expensive people for that have had training for wiring things together, etc. Any slum in developing nations features lots of housing that people bang together out of trash. Very unsafe. But it works. We've been creating shelters for ourselves since prehistory. It's not that hard. Millions of people live in slums. Upgrading that kind of housing to something slightly better isn't all that hard. Most people that a are a bit skilled can bang together a shed in their garden in no time at all. Putting a few solar panels on top isn't that hard either. And you can plug them into batteries easily. You can buy that kit on Amazon and run your power tools of that. All legal. It's only when you want that in your house connected to the grid that cost suddenly balloons from a few thousand to many tens of thousands. Exact same technology. Maybe you'll use slightly more panels and a bit bigger battery. But now it's a lot of gate keeping by inspectors, electricians, certified equipment, etc. that come into play. Same with houses. You can buy a recreational vehicle or caravan for a reasonable amount of money. Second hand these are very affordable. And some RVs can be quite nice to live in and even have AC. So, why are houses so expensive relative to RVs? Prefab housing has been a thing for decades. If you remove the wheels from an RV, it's basically a house. If you live in an RV, you are referred to as trailer trash. It has a stigma. But it's very cheap. Poor people do that. Because it's very affordable housing. That's why it's a popular option for people that would otherwise build slums.
testdelacc1 1y ago
The author makes an error while explaining Jevons’ Paradox. They say “the cheaper and faster we got at producing coal, the more coal we ended up using”. But that’s not paradoxical at all. That’s basic supply and demand curve from economics 101. It’s exactly what you’d expect. Whereas if you take the extraordinarily difficult step of opening Wikipedia (https://en.wikipedia.org/wiki/Jevons_paradox https://en.wikipedia.org/wiki/Jevons_paradox), you understand the real paradox. Jevons observed that when steam engines get more efficient and individually use less coal, we end up deploying many more steam engines in many new industries and use cases, increasing coal consumption overall. This seems like a basic oversight, maybe this guy hasn’t heard of Wikipedia. On the other hand, I think he wants to push the narrative that AI is seeing enormous productivity gains. He does this by using price per token, which has fallen. Very similar to Jevons supposedly observing “coal production”. But the author is struggling to point to new industries and use cases that were opened up by AI, like when we deployed steam engines back in the 1860s. So he misstates Jevons paradox, removes the paradoxical part, and makes it seem like his thesis makes sense. Jevons’ Paradox could still apply here! I’m not saying it doesn’t. But we just haven’t seen the examples quite yet. A good example would be an observed surge in demand custom built software as software engineers become more efficient. But lower token costs ain’t it.
- tbrownaw 1y ago
  > But that’s not paradoxical at all. That’s basic supply and demand curve from economics 101. It’s exactly what you’d expect. The key part is the "demand more than eclipsed the cost savings" bit. The cotton gin is another well known example, labor per unit down, labor for the whole industry up.
- dig1 1y ago
  a16z is heavily long on AI, so this article sounds very biased. From the article: If you live in the United States today, and you accidentally knock a hole in your wall, it’s probably cheaper to buy a flatscreen TV and stick it in front of the hole, compared to hiring a handyman to fix your drywall. Probably because the US has been focused on services for years rather than physical goods production. Everything else in US is focused on importing cheap(er) goods or materials. > On the other hand, I think he wants to push the narrative that AI is seeing enormous productivity gains. That is my impression as well. I would be thrilled to see this mythical 10x productivity. Even with 2x productivity, I would be highly pleased. This should mean developers (and everyone else) are producing 2x more quality, software (and general services) are 2x better? I see none of that, except 2x more junk. Did AWS, GCP, or anything else become 2x cheaper and 2x more stable? Maybe I'm living under a rock.
didibus 1y ago
Be warned, this is actually an article about LLMs :p
qaq 1y ago
A friend works for accounting firm servicing decent number of HVAC shops they are not as profitable as it would appear from outside from crazy markups.
ryao 1y ago
> If you live in the United States today, and you accidentally knock a hole in your wall, it’s probably cheaper to buy a flatscreen TV and stick it in front of the hole, compared to hiring a handyman to fix your drywall. While this is true, the costs are inflated because you need to repaint the entire room to get the original look, rather than only pay the cost of merely replacing the drywall. Of course, some handymen are much more expensive than others, so it is possible that is more expensive too. If you are one of the few using wallpaper and have extra wallpaper for just such emergencies, using the extra wallpaper to paper over it should be cheap.
mysterypie 1y ago
> With widespread AI adoption we plausibly could consume 10x or more of the service: Legal services, for example, plausibly fit this bill. A ten-fold productivity gain in legal services sounds simply awful for society. Imagine the time and money sink if everyone can sue you for every frivolous thing because AI can prepare and file the paperwork instantly without needing a lawyer. You'll need your own AI to defend against the onslaught of legal disputes. Every contract for jobs and every terms & conditions for services will be 10x longer because AI has a much higher complexity threshold compared to a human. My belief is that one reason tax returns became much more complicated in the last ~30 years is because of tax preparation software. In the era of paper tax returns, there was a limit to the complexity that an individual or even an accountant could handle, so there was a limit on how complicated the government could make it. Most normal people rarely need a lawyer in their lives. With AI's productivity explosion in the legal services, you're going to need legal services every day. Your neighbor wants to borrow your chainsaw? Your AI legal agent will negotiate a liability waiver with his AI agent.
- Havoc 1y ago
  Id blame the complexity of tax returns more on lobbying. Everyone wants their own industry custom exemption and that in turn creates holes that need to be patched etc
- nitwit005 1y ago
  There are a lot of fields where efficiency gains tend to be illusory. No one expects some new innovation in marketing to cause spending to plummet because of the efficiency gains. People have been genuinely innovating in marketing for a long while, and it's never happened. If anything, it seems to inspire more spending.
tbrownaw 1y ago
> “Baumol-type effects” means that everything that didn’t get more productive got more expensive anyway, but we consume more of it all the same because society as a whole got richer. It depends how you measure. The cost in goods or purchasing power goes up, but the cost in hours stays the same.
m0llusk 1y ago
Seems like most uses for hallucinating bullshitters that steal intellectual property are going to require significant human oversight, likely often multiple levels of human review, with almost everything they do that has value.
baxtr 1y ago
> How did this happen? 100 years after Jevons published his observation on coal, William Baumol published a short paper investigating why so many orchestras, theaters, and opera companies were running out of money. He provocatively asserted that the String Quartet had become less productive, in “real economy” terms, because the rest of the economy had become more productive, while the musicians’ job stayed exactly the same. The paper struck a nerve, and became a branded concept: “Baumol’s Cost Disease”. I find the term “cost disease” very negative. It actually describes positive social progress. Instead of a “disease,” it’s really a sign of a healthy, advanced economy.
gadders 1y ago
All I know is, if millions of people are thrown out of work, but billionaires become trillionaires, society won't be stable.
absurd1st 1y ago
> if you automate 99% of a job, that last 1% the human has to do is incredibly valuable because it’s bottlenecking everything else. The author is being (intentionally) naive here. History and current research suggest that when technology automates the vast majority of a complex job, it can lead to the "deskilling" of the human worker. This Lancet article (published Oct 2025) discovered that doctors were found to be less adept at finding precancerous growths during colonoscopies after just three months of using an AI tool designed to spot them: https://www.thelancet.com/journals/langas/article/PIIS2468-1253(25)00133-5/abstract https://www.thelancet.com/journals/langas/article/PIIS2468-1... And the thing is, I think the above finding is pretty intuitive. If AI performs 99% of a radiologist's diagnostic work, the human's role will very likely be reduced to a skill that is more routine, that requires less expertise, like a final check or something - and thus commands lower wages.
- KumaBear 1y ago
  Yet prices of these tests will not go down. AI and the companies that perform the test will see the rewards of eliminating these skilled jobs. The consumer will not see the savings.
  - jonbiggums22 1y ago
    Why would they go down? Once all the existing workforce is deskilled or retired there's no going back so they can jack the service price up. If it was an open platform you might have competitors spring up as a relief valve to that but the space is so regulated I don't think there's any room for that kind of platform.
bob1029 1y ago
It's cheaper to fix the hole, even if you screw up color matching on the paint a few times. I've seen a lot of people blow a lot of money on really basic stuff like this (myself included). The lack of basic awareness around hvac, landscaping, drainage, drywall, plumbing, electrical, et. al. has me wondering if I'm still in the right business. ChatGPT can't carry a bag of sand up a hill or dig a ditch. It can tell you about these things and make you feel like a hypothetical god over them, but it can never do the actual work on site. I don't feel like there's a lot of competition around being in Texas crawl spaces during the summer.
ZeroGravitas 1y ago
> From the article: If you live in the United States today, and you accidentally knock a hole in your wall, it’s probably cheaper to buy a flatscreen TV and stick it in front of the hole, compared to hiring a handyman to fix your drywall. I can't tell if that's the worst AI boosting analogy I ever heard or the most unwittingly accurate. First of all, flat screen TV and plasterboard hole repair are in no way substitutable goods. "Why is there a new TV behind the front door dear? The handle was bashing the drywall and it was cheaper than a handyman." But okay, let's assume you accidentally but conveniently punched a hole right where you would want a TV. And you don't already have a TV there. Who is going to wall mount this new TV in a home that can't do basic drywall repair?
- stockresearcher 1y ago
  > "Why is there a new TV behind the front door dear? The handle was bashing the drywall and it was cheaper than a handyman." "Isn't the handle going to bash the TV now?" "It's ok, dear; replacement TVs are cheaper than hiring a handyman"
jeromechoo 1y ago
I got a $1500 quote to replace a stuck thermostat in my car from my local mechanic. After some Youtubing I was able to replace the part myself with $150 in parts. I got a $5000 quote to fix my AC 2 summers ago and no amount of Youtube was able to help me DIY a fix. Maybe in the long term there will be more HVAC techs than auto mechanics. Somehow I don't think that's likely.
1vuio0pswjnm7 1y ago
"If you can make $30 an hour as a digital freelance marketer (a job that did not exist a generation ago), then you won't accept less than that from working in food service." Yesterday's food service workers are today's web marketers. This might explain why the www has become so polluted with garbage
andro_dev 1y ago
Private Equity is the main driver of price increases in this type of stuff. https://www.marketplace.org/story/2024/10/24/private-equity-buying-up-businesses-in-the-skilled-trades-hvac-plumbing-electrician https://www.marketplace.org/story/2024/10/24/private-equity-...
lamontcg 1y ago
It seems we have a sort of Cantillon Effect in wages (spilling over from IT down into HVAC and food service), but not in goods. And I'm not sure the AI/LLM focus sheds any light at all on the situation. Unfortunately, AI/LLMs aren't AGI and they're just a tool. They're just a better machine (assuming it all pans out) that radiologists all need to become experts in using. The way to analyze the situation isn't that the radiologists are the "bottleneck", the radiologists are the experts who are trained to use the tools.

137 points by walterbell 1y ago

One interesting consequence of this is that your opportunity cost is now highest it's ever been. By choosing to post on Hacker News instead of spending my time better (perhaps even as simply as watching my daughter sleep) I am wasting more value than ever before. In days past, you were substituting something mindless for this. Today, by not spending your time with your family, or reading, or on your hobby or relaxing you are paying an ever more valuable slice of time on addictive social media like this.

harikb 1y ago

There is a simpler explanation - HVAC jobs are directly influenced by the push to covert everything to heat-pumps. And good heat-pumps are expensive. So when you install a $15K to $25K, installation fee also goes up. I am surprised Solar isn't up there. Panels are cheap, install is what we pay for 10 years+

cake-rusk 1y ago
An AC is a heat pump too.
- bhhaskin 1y ago
  A Heat pump is just AC with more valves.
- korhojoa 1y ago
  I don't know what the deal is about people saying heat pumps are expensive. They used to be a little pricier than AC units, but it's just a 4-way valve in addition to one. I just looked it up, and I can buy a heat pump for 200-400 euros (depending on desired output), installation is ~400 euros. Why are you paying 20-30x for something identical? This sounds like a price difference created by government behavior, like with solar panels and related hardware which seem to be significantly overpriced in north america.
  - danans 1y ago
    > This sounds like a price difference created by government behavior It's a price difference created by market segmentation of heat pumps as a luxury product in the US, and the relative lack of qualified installers due to our under-investment in education in the trades.
  - Gigachad 1y ago
    Is this some country specific terminology? At least in Australia I've never seen an air conditioner that didn't use heat pump technology. Aside from evaporative cooling that is.
    - kelnos 1y ago
      Air conditioners (the things that can make a room colder, but not hotter), are indeed heat pumps, but in the US when we refer to a "heat pump" we mean the same technology, but with a reversing valve so that it can make rooms both colder and hotter.
      - Gigachad 1y ago
        Interesting. I’ve never seen one that couldn’t heat and cool before. Even crusty 30 year old window units can do both. Seems almost absurd to not utilise it both ways.
  - numpad0 1y ago
    You have to specifically look for cooling only AC where I am. Most ACs come with heat-dehumidify-cool mode selection and therefore qualify as "heat pumps", as far as how the term is used. I think it's just quirks of regions that traditionally didn't have ACs by default.
bradlys 1y ago
It's not even that. It's that rich people are the only thing the trades are catering to now. https://www.youtube.com/watch?v=qT_uSJVCYds https://www.youtube.com/watch?v=qT_uSJVCYds Example of a solar install that was under $20k via DIY - maybe took this guy 1-2 weeks of full-time work. But he was quoted $90k and he did most of it himself - only hiring a backhoe operator to move some dirt around. We're at the point where the trades are only going to cater to rich/desperate people because the margin they'd make on a job that is DIY-able (and charged a fair price) is not worth it to them. Why do 5-6 low margin jobs when you can do 1 high margin (rip-off) job? Your only competition out there is someone with the will to do it. Builders in CA are massive ripoffs as well. I think the only way you bring costs from trades down is by having all your workers in-house - which is only doable for corporations. Your average homeowner is just fucked and is gonna have to youtube everything.
- hexbin010 1y ago
  > It's that rich people are the only thing the trades are catering to now. This is my gut feeling too. I've known so many rich people who just accept whatever number a tradesperson quotes. There is no way that hasn't had a mass effect
  - quadrifoliate 1y ago
    I'm not rich (or at least, don't feel rich with the enormous cost increases on everything combined with no promotions for 3 years) -- but how do you negotiate with a tradesperson exactly? All of the major trade companies around where I live (HVAC, plumbing, electrical etc.) in the US have rates that they quote before the person will even show up. As a new homeowner who didn't grow up in the US, that's all I've ever dealt with. If the answer is “Give them a number you're comfortable with, and just DIY it as an alternative” -- that's fine, and I do it for anything simple; but for the remaining ones, I have already made a determination that learning this skill would be way more in terms of time invested than the $500 or whatever absurd number they are quoting for a simple repair (this logic likely breaks down over time, and I'm trying to invest more time into learning more house repairs). I have tried pre-purchasing some parts in the past; and asking them to use them for the install -- that one had some success and a guy told me how much his company marks up parts (n00%). I do try to get multiple quotes for something, but the difference between them isn't usually appreciable; they're all absurdly high. I've tried to ask them for a parts v/s labor breakdown in the past; some won't even provide that.
turtlebits 1y ago
Good mini splits aren't expensive. They're expensive because HVAC installers are fleecing US consumers. A majority of mini splits are made in China and are inexpensive and reliable because they're so pervasive in Asia. Most are rebadged Midea or Gree. You can get a decent mini split for <1.5K and install it yourself for $200 in tools.
- jonway 1y ago
  It is expensive, but I think you're underestimating the costs. If the AC catches fire because your electrician skills are bad, what happens? I guess you can rent a ladder if you need one, but they're at least $200 if your split is on the second floor and ladders can be deceptively tricky, and load ratings must be considered. Condensation can kill you and be an extreme cost with mold. Your first mini split is going to take a real long time to install, I promise, assuming you size it right. There is a non trivial risk to life and limb. This is one of those "Reality has a surprising amount of detail" things.
  - trollbridge 1y ago
    Catches fire? The amount of electrical work with installing a minisplit is minimal. And HVAC technicians are not electricians, either. The skill involved is that of tightening screws on screw terminals.
    - jonway 1y ago
      You're gonna plug it into the outlet? its going to probably need a circuit at the breaker.
  - turtlebits 1y ago
    If you're not comfortable with the electrical work, hire an electrician. Of course don't DIY it if you're not comfortable, but a simple exterior wall install is fairly straightforward. On a second floor install, (with the condenser on the ground) you only need a small egress hole you can drill from the interior. You'd need a ladder just to secure/cover the lineset.

userbinator 1y ago

Fortunately the massive amount of information available online, continued search-engine-degradation notwithstanding, often means finding out how to do many things yourself is much easier and cheaper than hiring someone else to do it.

chemotaxis 1y ago

That's a lot of economic theorizing, but to me, it doesn't seem to be substantiated all that well. You can just as well argue that labor is getting more expensive in the West because of two non-market pressures. First, we have a multitude of government programs that seek to eliminate extreme poverty, so there are fewer people who are desperate to take any job for any money. Second, you have consumer protection policies that make it genuinely expensive to, say, be a HVAC repairman. Educational requirements, permits, licensing, business insurance, waste disposal, etc. On my neighborhood Facebook group, every time someone asks for recommendations for menial, minimally-skilled backyard labor, they always insist the person needs to be licensed, bonded, and insured. And then, they're surprised that it costs $10,000 to paint a fence.

WarOnPrivacy 1y ago
> First, we have a multitude of government programs that seek to eliminate extreme poverty, Clarification: In some places we absolutely do. In others we absolutely do not. > so there are fewer people who are desperate to take any job for any money. I think is is better reflective: There is huge surplus of employers have that set up systems that insure they do not hire qualified people. Job portals that auto-trash applications from unwanted applicants (1st time, most minimal of crim rec, wrong zip codes) are one massive example. source: me+kids spent a decade in red state, hunger-level poverty. kids who got zero replies during months/years of entry level job apps.
aeonfox 1y ago
> eliminate extreme poverty, so there are fewer people who are desperate to take any job for any money One way to eliminate extreme poverty and increase skilled labour, is to ensure children have enough nutrition, health, schooling, and funds to pursue skilled worked in adult life, which usually involves making time outside of work, adequate health, some prerequisite education, and a sufficient financial buffer to actually upskill. A second thing is Baumol's Cost Disease. If there are other industries that are more rewarding that require less effort, no-one is going to pursue those options. Why be a clever guy who makes a product (or becomes a HVAC repairer, electrician, etc.) when you can get a comfy job at a FAANG (or whatever the acronym is today). You could sub in benefits here, but I don't think people are thriving on benefits in the US. But I'm an outsider, so I wouldn't know. But there's also a secret third thing that people don't often consider, which is the culture. If there's a culture that doesn't privilege working hard, or educational attainment, etc., people won't seek those things.

magicalhippo 1y ago

Just had our minisplit develop a leak after 7 years. The shop recommended replacing it, as just the refrigerant is half the price of a new one if most has to be replaced, due to environmental taxes. Basically a repair is guaranteed to be at least 50% of new price of NOK 23k ($2.3k) installed and can quickly approach 80+% if the guy has to spend time on it. That made me wonder how on earth they make money on selling these things. And how effective that tax was, given it's pushing us to replace a unit that's probably fine for many more years with just a bit of TLC. edit: fixed pricing brain fart

tass 1y ago
23k seems like a lot, especially so if the leak is somewhere other than a hidden part of the line. Equipment cost is likely only a couple of k, and labour to replace without running new lines is maybe a few hours. Please get a second opinion, especially if you can find a non-shop to give you one.
- magicalhippo 1y ago
  > 23k seems like a lot, That is because it's wrong. Sorry, just woke up. I'm in Norway, and it's 23k NOK, or $2300. The shop said filling my system back up with refrigerant if it was empty would be around $1.3k, and based on what I've heard I don't think that's off by much.
  - tass 1y ago
    Oh I don’t know how I missed that unless you made an edit, but I also just woke up :) This price makes more sense. 23k didn’t sound too far off what an American installer would try charge for a new system in a high cost of living area, so this wasn’t too unbelievable.
    - magicalhippo 1y ago
      Yeah edited it, should have clarified. > 23k didn’t sound too far off what an American installer would try charge for a new system in a high cost of living area I've heard these insane prices. I think 2.3k is pricey enough, you can get cheaper units here but SO wants the pretty indoor unit so pretty indoor unit she gets.

confirmmesenpai 1y ago

how expensive is AC repair in Hong Kong?

trollbridge 1y ago
Since AI is the future, here is what AI says (which is basically sourced from a couple Reddit posts): "The cost to repair an AC in Hong Kong varies by the problem, but basic repairs can range from approximately HKD $500 to $1,000, while major repairs like a compressor or refrigerant leak can cost HKD $1,500 to $4,000 or more. Inspection fees are often around HKD $500, with the repair costs and any needed parts being quoted separately. " Basic repair US$64 - $129 Major repair $193 - $515 Inspection $64 Somehow, American HVAC prices are orders of magnitude higher than that.

mlsu 1y ago

Lots of people do all kinds of things that are not explicitly written down at their jobs. Those things cannot be tokenized, they cannot be taken in by AI no matter how intelligent and sophisticated it gets. They are judgement calls, made by real people, who think harder and bring more to the table than any machine, no matter how many FLOPS. But, nonetheless, those jobs will probably disappear, and the machine will reorganize itself to maximize its self-legibility, making tons more money but becoming yet more shitty and inhumane in the process. Discarding the whole reason the jobs exist in the first place (stuff like Value and Service — oh excuse me, sorry, meaningless cost centers to be optimized). Sort of like how Radiologists do all kinds of important shit, that gets entirely hand waved away in this think-piece as 99% automatable. Yeah, sure guys, the radiologist — actual doctors for fucks sake — I’m sure he is nothing but a warm body between the patient and the computer, signing paperwork and collecting cheques.

nl 1y ago

This is a very interesting piece. I'd never heard of "Baumol’s Cost Disease" but I think the thing it is appliesd to most often here in Australia is coffee. Everyone complains that it is $7 for a cup of coffee, and yet demand for barrista coffee keeps increasing and demand for barristas keeps increasing.

csours 1y ago

Classic Paradox of Automation - As automation gets better, two things happen: Cost of goods goes down - think factory automation improving line rate. There is less human intervention, but that intervention requires more expertise.

seemaze 1y ago

How are ‘new cars’ and ‘cell phone services’ considered ‘unregulated’?

rablackburn 1y ago

> We are at the point in the technology curve with AI where every day someone figures out something new to do with them, meaning users will take any chip they can get, and use it productively. Sure, that's an assertion. But (with just as many citations), mine would be: This boom is absolutely, 100%, fueled by the combined factors of: 1) employees outsourcing the cognitive load of their jobs to models that are, impressively "close", but not quite _as_ good as a well-trained human. ie, we're replacing google with a fun, but terribly energy-wasteful (and _very often_ factually wrong) "make up an answer" tech. and 2), AI "app developers" who are having fun with the previously "impossible" (*cf. https://xkcd.com/1425/ https://xkcd.com/1425/) APIs of multi-modal natural language, and "didn't sci-fi warn us about this?" simulations. Neither of which are good for productivity, if we measure productivity as "improving circumstances for the mutual commonwealth of all life". Which is the goal. * oh, I _did_ use a citation after all. It is an interesting article, but _far_ too sure of itself in all the wrong areas.

bcrosby95 1y ago

> HVAC wage This is mostly down to people being afraid of anything even remotely trades-like. Learn to do some basic home repair, it will save you thousands. > This graph can mean different things to different people: it can mean “what’s regulated versus what isn’t” to some, “where technology makes a difference” Cars are pretty heavily regulated... What I see is what is necessary to live and what isn't. Elastic vs inelastic demand. > the average American middle-class household can comfortably manage a new car lease every two years Huh, no, the average American middle-class household cannot do this. > If one sector becomes hugely productive, and creates tons of well-paying jobs, then every other sector’s wages eventually have to rise, in order for their jobs to remain attractive for anyone. I'm sorry, but anyone who has lived in the lower income brackets knows this just isn't true. This is hard to read. Whoever wrote this is extremely out of touch and thinks they're eminently intelligent. It reminds me of the "smug San Francisco" South Park episode. The world is going down a road of hurt and you've got elites who are so busy "winning" over the past 50 years running around sniffing their own farts.

Daz912 1y ago
>This is hard to read. Whoever wrote this is extremely out of touch and thinks they're eminently intelligent. That’s funny I thought the exact same thing reading your comment.
kelnos 1y ago
> This is mostly down to people being afraid of anything even remotely trades-like. Learn to do some basic home repair, it will save you thousands. Installing a new HVAC system is not "basic home repair". Yes, there are HVAC-related repairs that qualify as basic, but we're also talking about the big things. And while yes, many homeowners could learn how to install a new heat pump, run refrigerant lines, make sure every connection is torqued properly, etc., most would not want to or have the time to do so, and that's fine, normal, and expected.

Gigachad 1y ago

This was pretty interesting. But the part I didn't get is where its stated that things got more expensive, but we consume more of them because we got richer. Is this not just inflation? If everyone got paid more and everything got more expensive, are we not essentially level?

FloorEgg 1y ago
It seems maybe you mixed up non-fungible value-bottlenecking human services with "everything". Many things can get cheaper, some things get more expensive, and median person gets more wealthy and buys more of both. In reality, yes, inflation plays a role in this, but the article is pointing to other patterns layered on top of it. On average, over long term, despite inflation, people can afford way more good and services.

deleted 1y ago

[deleted]

ggm 1y ago

The inflation in health care cost is not down to Jevons in my opinion. The likelihood of AI job displacement is low because the demand backlog is high. Robotics will reduce back injury rates and so reduce Nurse shortages, for example. Misdiagnosis rates cause increases in compensation claims so improvement in diagnostics reduce risk so insurance premiums(for hospitals) should go down or at least not rise as quickly compared to inflation. Note that the cost of health is high even in the economies without the broken US health system, and we have the baby boom moving through which is a huge bubble of cost associated with age. Not that there's no component of Jevons in this, but it doesn't explain everything. A thing said to me in Argentina resonated: They pay doctors, nurses, pharmacists slightly more if they will do out-calls to elderly people in the community at large. The increase in staff cost to have home calls offsets the massive increase in care costs if these people cannot be cared for in their home and move into a managed care facility. It's partly an externality if you privatise healthcare: who cares if the state has to pick up the tab, right? But in a more integrated view of the costs here, its better to pay more for people to help keep the elderly in their own home as long as possible. (elderly, intending to stay in my own home, not in the US health system)

zeroonetwothree 1y ago

I'm not sure why everyone picks on radiology as the 'obvious' field that will get automated. So far it has been the opposite: > In 2025, American diagnostic radiology residency programs offered a record 1,208 positions across all radiology specialties, a four percent increase from 2024, and the field’s vacancy rates are at all-time highs. In 2025, radiology was the second-highest-paid medical specialty in the country, with an average income of $520,000, over 48 percent higher than the average salary in 2015. Simply put, radiologists do a lot more than merely read scans: > Radiologists are useful for more than reading scans; a study that followed staff radiologists in three different hospitals in 2012 found that only 36 percent of their time was dedicated to direct image interpretation. Source: https://worksinprogress.co/issue/the-algorithm-will-see-you-now/ https://worksinprogress.co/issue/the-algorithm-will-see-you-...

zeroonetwothree 1y ago
In a similar vein, studies have found that software engineers spend only ~30% of their time coding on average. Yet we're similarly meant to believe that AI is going to replace human engineers? Ironically this belief is often held by software engineers themselves, as if they don't realize that they do so much more than generate characters. Bizarre.
- big-and-small 1y ago
  With this attitude you'll never get investments...
trollbridge 1y ago
A radiologist read my brother-in-law's MRI and contacted him and told him to go directly to the ER and actually wrote up a referral to have him immediately admitted. This happened in the middle of the night since the radiologist was reading them on the night shift. He was admitted and operated on two days later (as he had to be prepared for surgery and have additional pre-op testing done). No AI replacement is going to be doing that anytime soon.
- 1y ago

blueblisters 1y ago

There is probably an equivalent of Amdahl's law for GDP - overall productivity will be bottlenecked by the least productive sectors. Until AI becomes physically embodied, that would mean all high-mix, low-volume physical labor is likely going to become a lot more valuable in the mid-term.

AngryData 1y ago

The problem isn't tradework costing more, the problem is most people making less money thanks to wage stagnation and can't afford reasonable trade rates. Capital costs for the neccessary tools are also higher than ever. I can build a house 4x faster today than my father could back in the day, or alternatively with 4x less labor, and yet he could buy a house, 2 cars, and support 3 kids on his single wage. Meanwhile I struggle to do more than just survive in my little shack house built from scrap on an empty plot doing the same thing. The only jobs that earn me a decent wage is for corporations or for people near or in the top 1% of wage earners. If the average person made more money I would have more work and more money. But as it is a lot of residential work would be of negative value to me at the prices people can afford, and with less work to do and farther and farther travel distances for it my prices must keep rising to stay solvent.

jillesvangurp 1y ago
It's rules and legislation. The job of banging together reasonably serviceable form of shelter isn't that expensive. It's only expensive if you have to jump through a lot of hoops to use certified designs, materials, etc. deal with inspections, use expensive people for that have had training for wiring things together, etc. Any slum in developing nations features lots of housing that people bang together out of trash. Very unsafe. But it works. We've been creating shelters for ourselves since prehistory. It's not that hard. Millions of people live in slums. Upgrading that kind of housing to something slightly better isn't all that hard. Most people that a are a bit skilled can bang together a shed in their garden in no time at all. Putting a few solar panels on top isn't that hard either. And you can plug them into batteries easily. You can buy that kit on Amazon and run your power tools of that. All legal. It's only when you want that in your house connected to the grid that cost suddenly balloons from a few thousand to many tens of thousands. Exact same technology. Maybe you'll use slightly more panels and a bit bigger battery. But now it's a lot of gate keeping by inspectors, electricians, certified equipment, etc. that come into play. Same with houses. You can buy a recreational vehicle or caravan for a reasonable amount of money. Second hand these are very affordable. And some RVs can be quite nice to live in and even have AC. So, why are houses so expensive relative to RVs? Prefab housing has been a thing for decades. If you remove the wheels from an RV, it's basically a house. If you live in an RV, you are referred to as trailer trash. It has a stigma. But it's very cheap. Poor people do that. Because it's very affordable housing. That's why it's a popular option for people that would otherwise build slums.

testdelacc1 1y ago

The author makes an error while explaining Jevons’ Paradox. They say “the cheaper and faster we got at producing coal, the more coal we ended up using”. But that’s not paradoxical at all. That’s basic supply and demand curve from economics 101. It’s exactly what you’d expect. Whereas if you take the extraordinarily difficult step of opening Wikipedia (https://en.wikipedia.org/wiki/Jevons_paradox https://en.wikipedia.org/wiki/Jevons_paradox), you understand the real paradox. Jevons observed that when steam engines get more efficient and individually use less coal, we end up deploying many more steam engines in many new industries and use cases, increasing coal consumption overall. This seems like a basic oversight, maybe this guy hasn’t heard of Wikipedia. On the other hand, I think he wants to push the narrative that AI is seeing enormous productivity gains. He does this by using price per token, which has fallen. Very similar to Jevons supposedly observing “coal production”. But the author is struggling to point to new industries and use cases that were opened up by AI, like when we deployed steam engines back in the 1860s. So he misstates Jevons paradox, removes the paradoxical part, and makes it seem like his thesis makes sense. Jevons’ Paradox could still apply here! I’m not saying it doesn’t. But we just haven’t seen the examples quite yet. A good example would be an observed surge in demand custom built software as software engineers become more efficient. But lower token costs ain’t it.

tbrownaw 1y ago
> But that’s not paradoxical at all. That’s basic supply and demand curve from economics 101. It’s exactly what you’d expect. The key part is the "demand more than eclipsed the cost savings" bit. The cotton gin is another well known example, labor per unit down, labor for the whole industry up.
dig1 1y ago
a16z is heavily long on AI, so this article sounds very biased. From the article: If you live in the United States today, and you accidentally knock a hole in your wall, it’s probably cheaper to buy a flatscreen TV and stick it in front of the hole, compared to hiring a handyman to fix your drywall. Probably because the US has been focused on services for years rather than physical goods production. Everything else in US is focused on importing cheap(er) goods or materials. > On the other hand, I think he wants to push the narrative that AI is seeing enormous productivity gains. That is my impression as well. I would be thrilled to see this mythical 10x productivity. Even with 2x productivity, I would be highly pleased. This should mean developers (and everyone else) are producing 2x more quality, software (and general services) are 2x better? I see none of that, except 2x more junk. Did AWS, GCP, or anything else become 2x cheaper and 2x more stable? Maybe I'm living under a rock.

didibus 1y ago

Be warned, this is actually an article about LLMs :p

qaq 1y ago

A friend works for accounting firm servicing decent number of HVAC shops they are not as profitable as it would appear from outside from crazy markups.

ryao 1y ago

> If you live in the United States today, and you accidentally knock a hole in your wall, it’s probably cheaper to buy a flatscreen TV and stick it in front of the hole, compared to hiring a handyman to fix your drywall. While this is true, the costs are inflated because you need to repaint the entire room to get the original look, rather than only pay the cost of merely replacing the drywall. Of course, some handymen are much more expensive than others, so it is possible that is more expensive too. If you are one of the few using wallpaper and have extra wallpaper for just such emergencies, using the extra wallpaper to paper over it should be cheap.

mysterypie 1y ago

> With widespread AI adoption we plausibly could consume 10x or more of the service: Legal services, for example, plausibly fit this bill. A ten-fold productivity gain in legal services sounds simply awful for society. Imagine the time and money sink if everyone can sue you for every frivolous thing because AI can prepare and file the paperwork instantly without needing a lawyer. You'll need your own AI to defend against the onslaught of legal disputes. Every contract for jobs and every terms & conditions for services will be 10x longer because AI has a much higher complexity threshold compared to a human. My belief is that one reason tax returns became much more complicated in the last ~30 years is because of tax preparation software. In the era of paper tax returns, there was a limit to the complexity that an individual or even an accountant could handle, so there was a limit on how complicated the government could make it. Most normal people rarely need a lawyer in their lives. With AI's productivity explosion in the legal services, you're going to need legal services every day. Your neighbor wants to borrow your chainsaw? Your AI legal agent will negotiate a liability waiver with his AI agent.

Havoc 1y ago
Id blame the complexity of tax returns more on lobbying. Everyone wants their own industry custom exemption and that in turn creates holes that need to be patched etc
nitwit005 1y ago
There are a lot of fields where efficiency gains tend to be illusory. No one expects some new innovation in marketing to cause spending to plummet because of the efficiency gains. People have been genuinely innovating in marketing for a long while, and it's never happened. If anything, it seems to inspire more spending.

tbrownaw 1y ago

> “Baumol-type effects” means that everything that didn’t get more productive got more expensive anyway, but we consume more of it all the same because society as a whole got richer. It depends how you measure. The cost in goods or purchasing power goes up, but the cost in hours stays the same.

m0llusk 1y ago

Seems like most uses for hallucinating bullshitters that steal intellectual property are going to require significant human oversight, likely often multiple levels of human review, with almost everything they do that has value.

baxtr 1y ago

> How did this happen? 100 years after Jevons published his observation on coal, William Baumol published a short paper investigating why so many orchestras, theaters, and opera companies were running out of money. He provocatively asserted that the String Quartet had become less productive, in “real economy” terms, because the rest of the economy had become more productive, while the musicians’ job stayed exactly the same. The paper struck a nerve, and became a branded concept: “Baumol’s Cost Disease”. I find the term “cost disease” very negative. It actually describes positive social progress. Instead of a “disease,” it’s really a sign of a healthy, advanced economy.

gadders 1y ago

All I know is, if millions of people are thrown out of work, but billionaires become trillionaires, society won't be stable.

absurd1st 1y ago

> if you automate 99% of a job, that last 1% the human has to do is incredibly valuable because it’s bottlenecking everything else. The author is being (intentionally) naive here. History and current research suggest that when technology automates the vast majority of a complex job, it can lead to the "deskilling" of the human worker. This Lancet article (published Oct 2025) discovered that doctors were found to be less adept at finding precancerous growths during colonoscopies after just three months of using an AI tool designed to spot them: https://www.thelancet.com/journals/langas/article/PIIS2468-1253(25)00133-5/abstract https://www.thelancet.com/journals/langas/article/PIIS2468-1... And the thing is, I think the above finding is pretty intuitive. If AI performs 99% of a radiologist's diagnostic work, the human's role will very likely be reduced to a skill that is more routine, that requires less expertise, like a final check or something - and thus commands lower wages.

KumaBear 1y ago
Yet prices of these tests will not go down. AI and the companies that perform the test will see the rewards of eliminating these skilled jobs. The consumer will not see the savings.
- jonbiggums22 1y ago
  Why would they go down? Once all the existing workforce is deskilled or retired there's no going back so they can jack the service price up. If it was an open platform you might have competitors spring up as a relief valve to that but the space is so regulated I don't think there's any room for that kind of platform.

bob1029 1y ago

It's cheaper to fix the hole, even if you screw up color matching on the paint a few times. I've seen a lot of people blow a lot of money on really basic stuff like this (myself included). The lack of basic awareness around hvac, landscaping, drainage, drywall, plumbing, electrical, et. al. has me wondering if I'm still in the right business. ChatGPT can't carry a bag of sand up a hill or dig a ditch. It can tell you about these things and make you feel like a hypothetical god over them, but it can never do the actual work on site. I don't feel like there's a lot of competition around being in Texas crawl spaces during the summer.

ZeroGravitas 1y ago

> From the article: If you live in the United States today, and you accidentally knock a hole in your wall, it’s probably cheaper to buy a flatscreen TV and stick it in front of the hole, compared to hiring a handyman to fix your drywall. I can't tell if that's the worst AI boosting analogy I ever heard or the most unwittingly accurate. First of all, flat screen TV and plasterboard hole repair are in no way substitutable goods. "Why is there a new TV behind the front door dear? The handle was bashing the drywall and it was cheaper than a handyman." But okay, let's assume you accidentally but conveniently punched a hole right where you would want a TV. And you don't already have a TV there. Who is going to wall mount this new TV in a home that can't do basic drywall repair?

stockresearcher 1y ago
> "Why is there a new TV behind the front door dear? The handle was bashing the drywall and it was cheaper than a handyman." "Isn't the handle going to bash the TV now?" "It's ok, dear; replacement TVs are cheaper than hiring a handyman"

jeromechoo 1y ago

I got a $1500 quote to replace a stuck thermostat in my car from my local mechanic. After some Youtubing I was able to replace the part myself with $150 in parts. I got a $5000 quote to fix my AC 2 summers ago and no amount of Youtube was able to help me DIY a fix. Maybe in the long term there will be more HVAC techs than auto mechanics. Somehow I don't think that's likely.

1vuio0pswjnm7 1y ago

"If you can make $30 an hour as a digital freelance marketer (a job that did not exist a generation ago), then you won't accept less than that from working in food service." Yesterday's food service workers are today's web marketers. This might explain why the www has become so polluted with garbage

andro_dev 1y ago

Private Equity is the main driver of price increases in this type of stuff. https://www.marketplace.org/story/2024/10/24/private-equity-buying-up-businesses-in-the-skilled-trades-hvac-plumbing-electrician https://www.marketplace.org/story/2024/10/24/private-equity-...

lamontcg 1y ago

It seems we have a sort of Cantillon Effect in wages (spilling over from IT down into HVAC and food service), but not in goods. And I'm not sure the AI/LLM focus sheds any light at all on the situation. Unfortunately, AI/LLMs aren't AGI and they're just a tool. They're just a better machine (assuming it all pans out) that radiologists all need to become experts in using. The way to analyze the situation isn't that the radiologists are the "bottleneck", the radiologists are the experts who are trained to use the tools.