Author: Scott A. Wolla

Automation affects workers in different ways. In some cases, technology acts as a complement to human labor, and in other cases as a substitute for human labor. Over the long run, technological advance creates new goods and services, raises national income, and increases the demand for labor throughout the economy. However, it is important to note that these changes can create winners and losers—some workers will lack the skills to transition to new jobs. Recent technological advance has increased the demand for highly skilled workers, whose labor is a complement to the new technology, but the new technology has replaced the labor of some less-skilled workers.11 Therefore, it’s important that workers invest in their human capital and continue to improve their skills throughout their working years.

I always found this argument so hard to swallow. Just learn to code they said. No Be a plumber. No an electrician. This idea that it’s a fallacy because the pie always gets bigger I think leaves the biggest question on the table. What happens when humans can’t retrain fast enough, or can’t, or have spent 20 years in one profession. I always wondered what happened to the doctors in Star Wars universe. Robots and droids do all the surgery which seems smart right. All the precision of hte robot none of the humanity. But what did all the humans do? Join the imperial forces?

So I’m left with St Louis Fed’s tone deaf advice “continue to improve my skills during my working years”.

ps just now noticing this was written in 2020, well before the current AI boom.

_{Quote Citation: Scott A. Wolla, “Examining the ‘Lump of Labor’ Fallacy Using a Simple Economic Model | St. Louis Fed”, November 02, 2020, https://www.stlouisfed.org/publications/page-one-economics/2020/11/02/examining-the-lump-of-labor-fallacy-using-a-simple-economic-model}