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This person assumes AI is going to stay in its current form: a technology that requires an expert operator to help accomplish tasks. Most people are afraid of “next-level” AI, where no operator is required. If trucks can be moved without anyone at the wheel, truck driving is a job that won’t exist anymore. As simple as that. Whether trucks can be 100% autonomous remains to see.
Note that in this analysis, if you are a software engineer, you are not the "middle class" as most signs point to. Rather you are a member of an elite that the middle class must wrest power from.
The identity of the middle class is another question. You might assume that it's made of the people you know, but more likely it's underpaid workers from developing countries.
This person assumes AI is going to stay in its current form: a technology that requires an expert operator to help accomplish tasks. Most people are afraid of “next-level” AI, where no operator is required. If trucks can be moved without anyone at the wheel, truck driving is a job that won’t exist anymore. As simple as that. Whether trucks can be 100% autonomous remains to see.
Not if but when. 100% autonomous ability is well within reach.
"air traffic controllers were paid a median annual salary of $132,250 in 2022, or nearly four times the $33,380 median annual pay of crossing guards" It's not quite "expertise" that justifies the wage gap, it's supply and demand. Almost anyone can be a crossing guard--not everyone can be an air traffic controller. If AI theoretically could make anyone an air traffic controller, one would expect the salary to collapse…
We can study this by looking at examples!
Slovenia (where I'm from) has the 3rd lowest gini index in the world[1]. Meaning we are the 3rd most egalitarian country in the world with close to zero income inequality.
You would think this is fantastic, but in practice it means everyone's equally poor-ish. There's a lot of talent drain. Everyone in my millenial generation that's great at their job has either moved out of the country, works remotely for foreign companies, or has built a business that primarily targets foreign markets. They're starting to build a proper middle class, but there's nowhere for their money to go.
There aren't enough higher middle class folk to support all the services they'd want. So the extra money goes to foreign companies or into inflated real estate that has become unaffordable to anyone employed locally.
And there are no rich people to tax or ask for philanthropy to break the status quo. A net worth of ~$20mil puts you on the list of top 100 richest Slovenians as of 2023. Most of them made their money abroad and have also moved their wealth out of the country to avoid high taxation.
The concept of "upwards mobility" is barely worth talking about.
[1] https://en.wikipedia.org/wiki/List_of_countries_by_income_eq...
"air traffic controllers were paid a median annual salary of $132,250 in 2022, or nearly four times the $33,380 median annual pay of crossing guards" It's not quite "expertise" that justifies the wage gap, it's supply and demand. Almost anyone can be a crossing guard--not everyone can be an air traffic controller. If AI theoretically could make anyone an air traffic controller, one would expect the salary to collapse…
- “prompt engineer - accounting” who has vast history of accounting practices
- “prompt engineer - lawyer”. No more farming out writing up complicated EULAs to Skadden. Have your general counsel do all of this for you with the help of “AI”. Or maybe have an IPO prepared without the help of a middleman such as “JPM” or “Goldman Sachs”. Billable hours drop significantly.
- “prompt engineer - swe”. Instead of multiple teams of engineers. Have “Devin” scaffold out the basic application while you focus on architecting an end to end solution.
All of those “middle class jobs” once held by mid tier specialists have evaporated.
"air traffic controllers were paid a median annual salary of $132,250 in 2022, or nearly four times the $33,380 median annual pay of crossing guards" It's not quite "expertise" that justifies the wage gap, it's supply and demand. Almost anyone can be a crossing guard--not everyone can be an air traffic controller. If AI theoretically could make anyone an air traffic controller, one would expect the salary to collapse…
Sorry, I've become very pessimistic these days. If something can be used to permanantly reduce FTEs, it will be done.
Autor was just on the Odd Lots podcast, so if you don't feel like reading the paper you can listen to the interview where he talks about it.
The problem with the concept of a middle class job (one where you can comfortably afford living, fun, saving, etc I think is most people's interpretations), is that it represents an unstable equilibrium state. Incentives of most businesses are the opposite of someone in the middle class. Businesses don't think in terms how they can take so little such as to perpetuate some idyllic lifestyle unimpinged, they think in…
My understanding is that most people's understanding of "middle class" is "about 20% richer than me", and that this remains true regardless of how rich one is.
Most people, for most of the years since Joseph Marie Jacquard realised he could control a loom with punched cards, the Red Queen race of automation has given us more stuff and experiences per hour of labour — if you wanted to live the 1820s idea of a middle class life, you can retire as soon as you get around €$£ 25-50k of savings (just don't start a family, the rest of society considers this standard to be unacceptable for that, what with no electricity).
If this improvement in living standards is despite, or because of, each business trying to maximise revenue, is basically the entire disagreement between Adam Smith and Karl Marx; though it's worth also noting that neither liked rent-seeking, and if you have a completely efficient market then nobody can extract any profits because competition drives margins to zero… but also since then we've had research show that complex markets aren't and can't be efficient: https://arxiv.org/abs/1002.2284
If AI truly does take over most jobs of today (low to mid tier level SWEs replaced with a couple of “prompt engineers”). I would be okay, but only if there were proper support pillars in place. Healthcare should be free for all. UBI. And of course continued education provided to train workforce into something else.
Agree, and this would require serious taxation reform in most countries.