NOMIS Awardee David Autor, in an interview with Armin Müller, says we will not run out of work, and we can influence how new technologies affect work. The interview appeared in German in the Swiss newspaper Tages-Anzeiger. A translated excerpt follows.
Mr. Autor, most experts assumed that the pandemic would hit the less educated hardest. You looked into this and came up with some surprising results.
During the pandemic, it certainly hit the less educated harder. People who did personal services and low-paid work lost their jobs in much greater numbers. But the surprise was that after the pandemic, the labor market improved, much faster than expected and much more for the less educated.
Employers suddenly had to compete much harder to hire workers when the economy picked up. Many workers did not want to go back to poor or low-paying jobs. On top of that, the population was aging. The few young people gradually entering the labor market create a much more competitive labor market.
So the market provided higher wages?
In a conventional economic framework, things are always competitive, supply and demand determine wages, and the market is always in equilibrium. But that’s very stylized and unrealistic. In the real world, the employer has some market power. Not everyone quits if the wages is lowered by one franc. And if they are raised by one franc, people don’t line up for a job. This means that employees are not necessarily paid what they are productive at.
And that changed after the pandemic?
Employers have had to compete more aggressively for workers. As a result, wages are generally going up. Second, people are changing jobs much more frequently. And third, more productive employers are growing and less productive ones are shrinking. That’s not good for employers, but it’s good for workers and for productivity.
Did that surprise you?
Yes. I didn’t expect that. But the wages of the less well-paid rose more and faster than inflation, by comparison.
Continue reading the Tagesanzeiger interview: Künstliche Intelligenz wird die Ungleichheit verringern
Ford Professor of Economics
Massachusetts Institute of Technology (MIT)
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NOMIS RESEARCH PROJECT