Crossposted from https://sh.itjust.works/post/60082729
The economy isn’t splitting because of AI. It’s been splitting since 1973 — two years after Nixon took America off the gold standard, a full decade before the personal computer arrived. Every technology wave since has followed the same pattern. Productivity goes up. Workers get more efficient. And a larger share of that productivity goes to whoever owns the technology rather than whoever operates it.AI didn’t create this. It’s accelerating it.The labor share of American income has fallen from 70 cents of every dollar produced in 1947 to 53.8 cents today — the lowest since the Bureau of Labor Statistics started measuring it. The top 10% now drive nearly half of all consumer spending. Goldman Sachs individual-level data shows displaced workers suffer earnings losses that compound over a decade — delayed home purchases, lower marriage rates, real earnings growing nearly 10 percentage points less than workers who were never displaced.The aggregate story looks fine. The transition story isn’t. And you are living in the transition.Every AI displacement report you’ve read is measuring the wrong thing. Exposure scores cannot tell you what actually happens to employment without price elasticity data we don’t yet have. The spread between Goldman’s 7% GDP boost projection and Nobel laureate Daron Acemoglu’s sub-1% estimate is the difference between a productivity revolution and a historical footnote — and nobody, including the people building the technology, can tell you which one you’re living through.What history does tell us is this: technology has never produced permanent mass unemployment. But the gains go to the aggregate and the costs land on specific people. The workers who adapted in every previous transition captured most of the value. The ones who didn’t saw their earnings compress permanently.So the question isn’t whether AI is taking jobs. The question is the same one that has determined outcomes through every technology wave for the last 50 years: do you have leverage, or are you the leverage?
Yeah, when annual raises don’t come even close to inflation, you make less every year. That’s been happening for decades. That alone should show anyone that they’re being cheated even without all of the other signs. Even with hitting really high on additional merit-based increases, I’ve never had an annual raise that met inflation, so they were all essentially pay cuts. And usually changing jobs has involved a cut. Only promotions have given me more money and not nearly as much as the value the additional work and responsibilities bring to the company. I should be comfortably middle class with my position, but I barely afford a small home, small car, and rarely can take vacations. Though I do avoid major debt. And I’m doing way better than the majority of Americans.
It wasn’t the gold standard that broke the productivity to compensation ratio. It was breaking unions and labor laws, removing the taxes on top incomes, dropping trade barriers with China, Mexico and Canada, privatizing retirement accounts, and deregulating home ownership. Basically every right wing economic accomplishment for the past 50 years, has made life worse for the majority of the country.
Yes, it’s been like that since capitalism. That’s literally how capitalism works. Finally (hopefully) the world is catching up to what capitalism really is.
