[mushufasa]

As someone who attended this school and has a degree from their economics department: this finding very consistent from what I learned in classes covering the economics of innovation. Historically, technological revolutions have increased productivity and labor force participation, despite many pundits at the time worried about loss of jobs.

The core intuition for this phenomenon is that human society overall takes the tech productivity gains to do more things overall, creating new goods and services. The broader range of goods and services overall also enables more people to find work.

Put another way, "“One thing I love about customers is that they are divinely discontent. Their expectations are never static – they go up. It’s human nature. You cannot rest on your laurels in this world. Customers won’t have it.” -- one of Bezos's Amazon shareholder letters.

One of my favorite counterintuitive examples: The biggest economic gains from the 1800s Industrial Revolution actually came from the humble washer/dryer. By making routine homeware 100x more efficient, this (along with other home appliances) allowed more women to enter the labor force, nearly doubling labor force participation within a couple generations. Though, at the beginning, lots of people were opining about homemakers losing a sense of purpose or relaxing all the time.

It's certainly possible that this study is just reinforcing the researcher's biases from their previous understanding of the economics of innovation, and also possible that this study is accurate today but conditions will change in the future. That said, I believe the burden of proof is on the pundits claiming cataclysmic job loss, which is counter to economic historians' models of innovation.

[mamami]

This perspective very much ignores economic friction. The luddites were a thing because, metaphorically, not every washer can become a programmer. These large scale analyses often treat one person losing their job and a different person finding a job as equivalent, which does not reflect any kind of material reality

[anon7725]

The Luddite analogy is apt, however its sense is opposite to the way that it’s usually presented.

The Luddites were skilled artisans in the textile industry. They often worked from home, owning spinning and weaving equipment and acting as what we’d call independent contractors today.

The mechanization of the textile industry resulted in work that required less skill and had to be performed in a dangerous factory for suppressed wages that were determined by a cartel of factory owners rather than a robust market of small makers.

Sitting here 200 years on from the Industrial Revolution it seems to be an obvious good. But it sure did not sound like an appealing thing to live through if you weren’t one of the few owners of the means of production.

[grafmax]

Yeah actually the labor conditions of the working class were horrible as they entered factories, conditions only remedied by the spurs of the labor movement.

[Animats]

> Historically, technological revolutions have increased productivity and labor force participation, despite many pundits at the time worried about loss of jobs.

That was basically true from about 1830, when railroads came out of beta, to 1979.[1][2] During that period, wages roughly tracked productivity. There are solid US stats on this from at least 1950.

This has happened in other countries, too, but generally later than in the US. Here's a study from Japan.[3] In the UK, productivity and wages parted company around 2008.[4]

There are stats for China, but they only go back to 1995 and aren't taken that seriously even in China. Plus, China now has 200 million gig workers (!)[5] and data collection on them is weak. Official workforce size in China peaked in 2015, which may indicate that many gig workers are not being counted. This needs to be looked at more closely.

Productivity is going great, but the gains don't go to workers much.

[1] https://www.epi.org/productivity-pay-gap/

[2] https://fredblog.stlouisfed.org/2023/03/when-comparing-wages...

[3] https://www.rieti.go.jp/en/publications/summary/25090019.htm...

[4] https://fraserofallander.org/link-labour-productivity-wage-g...

[5] https://www.economist.com/leaders/2025/09/18/chinas-200m-gig...

[anovikov]

That's not about wages, but labor force participation. What changed around 1979 was that workers who were freed up due to automation, were employed in lower paid service roles that's why wages stopped following productivity. But they weren't left unemployed - through 1970s unemployment was quite high by today's standards, we are living in times of longest ever sustained low unemployment.

[pjc50]

Lost in this discussion is that there is an economic target for a minimum level of unemployment. It's how inflation control targeting works.

People want inflation when it's their own wages, and they want labour supply to be constrained to achieve that. But as soon as the wage inflation feeds through to price inflation, they get very upset. Transient but significant inflation was one of the successful attacks on Biden's economic record, for example.

Wages are flat because it's policy for wages to be flat so that prices can be flat.

[harrall]

Historically it seems humanity is often better off after major advances.

But it’s the transition that is the problem. The people living through the transition have to go through hell.

[Analemma_]

Yeah, I'm always annoyed at how blasé people are about these transition periods, where they seem to think the ends justify any means, and any chaos which happens as a result of the means.

You see this all the time when some new technology, especially an information disintermediation technology, gets compared to the printing press. "The printing press broke the monopoly on knowledge and brought Europe out of the Dark Ages!" Yeah, but first it killed millions of people in a century of warfare. Do the people in an equivalent position now get a vote, or are they acceptable casualties for the glorious hypothetical future?

[sethammons]

In one of my economic classes at my university introduced me to the book Shafted: Free Trade & America's Working Poor. I think this qualifies as an advancement and one that is oft argued as a net good for global trade.

The author contends that free trade has become a tool favoring corporate interests at the expense of workers’ dignity, community, and fair participation in economic decision-making.

Beyond that, they illustrate that net economic gains _should_ be able to also lift those same workers, providing enough surplus for re-training, but it doesn't. The gains flow to the top and the workers left in a worse position.

https://www.goodreads.com/book/show/310362.Shafted

[newyankee]

Especially from Global South who somehow do not even find a footnote in a lot of research

[dfxm12]

You can't take these things in a vacuum. Labor has gotten weaker over time. AI just gives more power to employers.

Take Klarna. They laid off 700 people, realized it was a mistake, but they are hiring people back as gig workers [0]. Not proper employees with a salary and benefits. The thing about the US in particular is that a job is not just a job. It's your social safety net, as too many welfare programs have onerous work requirements. Employers know this. They have way too much power, probably more than ever before in our lifetimes. AI gives them that much more power.

0 - https://www.livemint.com/companies/news/klarnas-ai-replaced-...

[pyuser583]

This is a relatively easy fix - separate benefits from specific jobs.

There's a strong social element to jobs - it's not just money, it's your friends. But that's an easy fix too - forming social units not based on employers. Unions used to fill this role, as did guilds, and just plain clubs.

These aren't huge problems.

[throwup238]

> One of my favorite counterintuitive examples: The biggest economic gains from the 1800s Industrial Revolution actually came from the humble washer/dryer. By making routine homeware 100x more efficient, this (along with other home appliances) allowed more women to enter the labor force, nearly doubling labor force participation within a couple generations. Though, at the beginning, lots of people were opining about homemakers losing a sense of purpose or relaxing all the time.

What exactly did your professors mean by "economic gain"? It'd probably take an entire thesis to unpack what that means and all the ambiguities that anyone could drive a train through.

The only way I can square that circle is if they meant that women's economic prospects declined so much with the automation of textiles that they had nothing left but small efficiency gains. Maintenance tasks like clothes washing don't produce any economic value outside the household, whereas spinning/weaving/sewing produces something the household can sell, trade, or gift. Early textile mechanization took place decades before washing machines were even a novelty so sure, "biggest economic gain" as long as you're measuring from a local maxima.

[pixl97]

Spinning and weaving had always been done by a relatively small portion of society. Hence by automating it you were not bringing time savings to the vast majority of people.

Instead the opposite may have occurred, when cloth became cheaper and the amount of clothing increased greatly increasing the amount of washing the masses had to do.

[Workaccount2]

I think the main fear is that AI is a companion that keeps getting better, rather than a tool that is nothing on it's own.

We've never had that before.

[pixl97]

And really it's a whole bunch of things we've never had before at the same time.

Factories can scale to the point that a single factory for a lot of products can meet the needs of all of humanity. Add in economies of scale and the number of actual work on the actual product jobs decreases for any one product over time.

Information technology can scale to the point that any one company can manage vast oceans of data about processes and conditions in the business exercising large amounts of control over economies.

Shipping and transport are fast, cheap, and ubiquitous. That huge factory from above can make anything then ship it anywhere cheaper than you can make it right next door.

Robots and further AI automation can insure the investor class gets even wealthier by not having to pay things like the 16 hours a day you don't work in health insurance. More so there is never a labor shortage by pesky striking workers asking for more pay or better conditions.

All the above setup conditions for the consolidation of control of almost everything by a very small number of entities.

[keeda]

Another thing we never had before is the huge skill differential between the jobs that will be automated away and the jobs that replace them. In the past, automation created new jobs that were higher-skilled, but still relatively easy for any of the displaced workforce to upskill to. E.g. if a machine replaced the work you did manually, it was not too difficult to learn to operate that machine.

But with AI the skills gap is huge. Taking software engineering as an example, previously a motivated bootcamp graduate could start churning out basic CRUD apps and be useful. Now a motivated senior engineer with AI agents could churn out an app a day. So the minimum useful skill-level is now at the level of a senior engineer.

And this is possible because of yet another thing we never had before: A "universal" knowledge worker machine. Knowledge work was "safe" because it was a relatively high-skill category and automation was only possible through software, which was expensive and slow to build, largely due to a shortage of software developers.

Now we potentially don't even need software for a huge range of cognitive tasks! Of course, the stochastic nature of AI probably means we will be writing software for a long time yet, but as above, existing (senior) developers can scale themselves up much, much faster.

[ACCount37]

The list of advantages human labor holds over labor of machines is both finite and rapidly diminishing.

[trashface]

Tell me more, I'm long term unemployed so have plenty of time to read stuff like this.

[mushufasa]

Here's one free article covering a book about the washing machine example https://www.theguardian.com/technology/2010/aug/29/my-bright...

[tuatoru]

If AI takes a fraction α of jobs, for it to be employment increasing, elasticity of demand for labor needs to be 1/(1-α).

[johnnyanmac]

>Put another way, "“One thing I love about customers is that they are divinely discontent. Their expectations are never static – they go up. It’s human nature. You cannot rest on your laurels in this world. Customers won’t have it.” -- one of Bezos's Amazon shareholder letters.

Nowadays, the new strategy is "you will own nothing, have worse more expensive services, and like it". The mood has completely shifted as of late. It feels more like the shareholder's demands are never static.