[beAbU]

My take is that if AI really improved productivity, then that makes labour effectively cheaper. Usually, when labour is cheap, then you buy lots and lots of it so that you can get a lot of things done.

I think it's called the Law of Demand?

Companies over-hired during COVID because the money was free thus making the labour cheap. Why are they not over-hiring now, during a time when workforce productivity is supposed to be at an all-time high?

Instead we are seeing layoffs, blaming AI, because the free-money chickens have come home to roost. These CEOs want to save face and not admit they were short-sighted during COVID.

[inanutshellus]

> that makes labour effectively cheaper.

But it isn't cheaper yet, right? Your current salary was defined pre-AI.

Now, though, maybe you're only worth a third of what you were but you can't live on a third, and your employer can't just start giving you less money, so... they lay you off then in a year or three when the tailspin starts to hit bottom, they hire Younger You for ~$X/3.

[alecbz]

If AI makes people more productive then labor is cheaper than it was pre-AI, even at pre-AI salaries, because you're getting more done at the same cost.