Economic Insights — A big risk associated with artificial intelligence is its potential to trigger a once-in-a-lifetime decline in labor’s share of national income.
After years of slow and steady development, generative AI technologies have exploded in popularity, and many experts believe that we are entering a new, AI-driven phase of the Industrial Revolution. Does this mean that labor is doomed to impoverished irrelevance? Previous technologies helped more than harmed labor, but AI is different, because it seems poised to overwhelming automate tasks currently done by humans, rather than improve the productivity of already-automated tasks. If AI is significantly more productive than the humans it replaces, labor may still come out on top thanks to increased spending power, but labor may see a once-in-a-lifetime decline in its share of national income.
This article appeared in the First Quarter 2024 issue of Economic Insights. Download and read the full issue.
