Pyramid Replacement
Matthew Barnett outlines several possible mechanisms of wage decline.
First, if AI results in a massive increase in labor supply, capital could become more of a constraint than labor. The returns to additional labor—machine or human—go down while those to capital go up. This means lower wages and higher returns to capital.
Second, when production r... See more
First, if AI results in a massive increase in labor supply, capital could become more of a constraint than labor. The returns to additional labor—machine or human—go down while those to capital go up. This means lower wages and higher returns to capital.
Second, when production r... See more