I’ve had a go at this issue back in June (100) Workers and AI - by Thomas L. Hutcheson - Radical Centrist (substack.com) but with this FT piece, it’s worth another shot.
Now is the time to put people before robots (ft.com)
Elon Musk: ‘There will come a point where no job is needed. You can have a job if you want to have a job for personal satisfaction. But the AI will be able to do everything.’
My [Harrison’s] research on global incomes shows there is nothing constant about labor’s share. In most countries, labor’s proportion of national income has been declining in recent years. Could one reason be Musk’s prediction about the power of new technology to replace jobs?
Harrison then considers possible causes:
One possible explanation is globalization, which can hurt workers because they have a harder time relocating than owners. Another possibility is the growing market power of big companies, which can make it more difficult for employees to maintain their share of profits. A third explanation, as Musk suggested, is the technological changes that make it easy to replace people with machines.
Actually, globalization can harm workers in more direct ways than forcing then to change jobs. A standard result of the Stolper Samuelson Theorem is that opening to international trade reduces the income of the “scarce” factor of production. Relative to the world, labor is relatively scarce in the US. Nevertheless, Harrison concludes that the principal driver has been technological change.
There is indeed no reason "technology" cannot reduce the labor share in the production function and may well have done so. Harrison asks, “What can stop this wider decline in labor’s share?” and basically recommends labor income will need to be mediated by public policy to reduce the incentive to substitute machines for labor.
Harrison’s policies to mitigate this are similar but not as specific as these of mine:
1. Replace employer "provided" health insurance with (improved) "ACA for all."
2. Replace the wage tax for financing of SS/Medicare/Unemployment Insurance (or any other life cycle/life circumstance transfer) with a VAT, taking the opportunity to zero out the deficit on this sub-account and keep it zeroed out.
3. Raise the Earned Income Tax Credit and make it more of a wage subsidy.
4. Compensate employers for social mandates like sick days/family leave.
5. Subsidize education and training for career changes. [And if careers were not implicitly age capped, retraining would be more cost effective for the worker.]
6. Finance all these (and with enough left over to ~zero out the deficit) with a combination of VAT, tax on net emissions of CO2, progressive consumption tax net of elimination of taxes on business income.
[Standard bleg: Although my style is know-it-all-ism, I do sometime entertain the thought that, here and there, I might be mistaken on some minor detail. I would welcome comments on these views.]