Since the 1980s, middle-income workers have been replaced due to automation. This has been achieved through the use of robots and software.
Automation has increased the value of educated labor, resulting in income inequality. This shift is because automation has made some tasks easier and quicker to complete, so those with the necessary skills and knowledge often have improved job stability.
Using artificial intelligence could lead to a decrease in the price of skilled labor and, thus, a reduction in inequality.
The developments in AI may be a game-changer in addressing the widening income gap in America – a problem that has been exasperated by automation. There is hope that this most recent technological advance could reverse the trend seen thus far.
ChatGPT, a new artificial intelligence by OpenAI, may affect white-collar workers to a greater degree than other job categories, according to OpenAI’s research published in March.
The technology could dampen the explosive wage growth they’ve experienced at the expense of their blue-collar counterparts by shifting more tasks to middle-skill workers, reducing income inequality. But that rosy future depends on how AI develops and whether we choose to regulate it.
Economist Daron Acemoglu of MIT found that automation has hurt blue-collar workers, with around 50-70% of rising US wage inequality since the 1980s being attributed to automation.
Workers without a bachelor’s degree doing routine tasks like assembly-line or administrative office work were replaced by machines, robots, and computer software. This led to decreased or stagnation of their wages, most notably in the middle class.
Skilled white-collar labor has become more valuable due to this automation, increasing wage inequality.
Economist David Autor from MIT found that while automation diminished occupations needing low-skill labor, the difference in incomes earned between holders of a bachelor’s degree (representing high skill) and those possessing only a high-school diploma doubled.
“Not only doesn’t it not replace you, it makes your expertise more valuable,”
For the past 50 years, replacing workers with machines has significantly increased demand and wages for labor focused on abstract tasks, causing a sharp increase in wage inequality.
In today’s world, artificial intelligence has set its sights on highly-skilled white-collar workers who were once the beneficiaries of inequality. This demographic is now likely to be affected by AI developments.
“The general presumption is that AI — and even before that, office software — would impact middle-skill workers,”
Autor continues to say:
“We’re really in a different era,”
Using AI, tasks that previous software relied on scripted instructions for can now be taught, such as how to ride a bike. Unlike these routines, AI can devise new answers for data it hasn’t seen before, much like one might learn a more complex skill than just following a recipe to make the same meal.
Autor adds to say:
It’s “powerful and opaque” because now “computers know more than us,”
A recent study conducted by OpenAI showed that language models—the type of AI used by ChatGPT—could affect up to 80% of tasks for 10% of the workforce and 19% of the workforce’s 50% of tasks.
Autor went on to say:
“With higher-income jobs potentially facing greater exposure to LLM capabilities and LLM-powered software.”
High-income earners holding bachelor’s, master’s, and professional degrees are particularly exposed when it comes to artificial intelligence (AI), according to a report. This exposure could decrease inequality or increase productivity, as AI could replace or make them even more productive.
Acemoglu notes that if AI is as capable as technologists believe, it can be an equalizing force in reducing inequality. This is because AI could replace higher-skilled workers, weakening the incentive for offering them high wages.
The use of technology in middle-skill work may not be advanced enough to replace high-skill workers. However, it can still increase productivity and quality, resulting in rising middle incomes.
Autor continues to say:
“You can imagine devolving some of the most highly skilled tasks to less skilled people,”
“Do what a doctor did traditionally because they’re augmented by this tool,”
Acemoglu adds to say:
“A crazy scenario, but there’s a lot of uncertainty,”
“We still don’t know the full capabilities of large language models,”
“It may turn out that this is an inequality-expanding technology, rather than adversely affecting the more skilled and highly paid workers,”
AI can potentially increase production levels and wages for journalists, managers, and radiologists rather than replace them. This is due to its ability to complement the work of these professionals instead of substituting it.
Acemoglu adds to say:
“We tend to underestimate how complex human tasks are,”
“The more skilled workers may be able to shield themselves,”
Automation of their job has taken place, and the next layer of high-wage jobs could now be an option for them.
Acemoglu continues to say:
“They won’t be as badly affected as when blue-collar line workers were when robots were introduced,”
“It is a new game, and we don’t know what that new game is going to be,”
The author believes AI can reduce inequality for those who have lost their middle-income jobs. Yet, this outcome necessitates changes in the training of workers, hiring practices of employers, and government guidance in terms of innovation to prevent automation from overtaking human labor.
The author adds to say:
“The incentives are not well aligned with social objectives,”
“This is all being pursued in an arms race by a bunch of for-profit companies,”
“There’s no reason to assume what’s good for Amazon and Google is what’s good for humanity.”
“The future is a choice”
To ensure that AI is used in a way that benefits everyone, we need to invest in education and training programs that equip people with the skills and knowledge to work alongside AI systems. We also need to prioritize diversity and inclusion in designing and implementing AI technologies to reflect all users’ needs and perspectives.
If we can harness the power of AI to create more efficient, effective, and equitable workplaces and societies, we could see a reversal of the decades-long trend of tech-driven inequality. By using AI correctly, we can create a future that works for all of us.
Source: Business Insider