Yes. The Gizmodo piece is taking a perfectly ordinary economic observation and turning it into a conspiracy. Its thesis is essentially: employers like AI because workers are frightened of asking for raises.
There are several problems with that.
First, productivity is itself a perfectly adequate reason to want AI. If an employee who used to produce $150,000 worth of output can now produce $200,000 worth, the employer has a very substantial reason to provide the employee with AI tools even if nobody's wages change. That's the normal process by which capital investment works.
Second, your point about large companies is important. The article treats wages as though every employee periodically marches into the boss's office and negotiates his salary. In a large corporation, compensation is generally determined through salary bands, performance reviews, promotions, market adjustments, and occasionally retention offers. An employee being reluctant to demand a raise because "AI might replace me" isn't remotely the principal mechanism determining compensation.
And there's an amusing contradiction in the argument. If AI really makes an employee substantially more productive, that employee becomes more valuable, not less. The threat is strongest only where AI can actually substitute for the person's work. In that case, yes, the employer has gained bargaining power—but that's because the employee's marginal productivity has changed.
Your small-business observation is even better. A ten-person business isn't going to announce, "We've installed ChatGPT, so we're firing six people." If the owner can eliminate six jobs without damaging the business, he probably already has an extraordinarily strong incentive to do so. The interesting question is why he hasn't. Often the answer is that the work still requires people, and AI merely makes those people more effective.
The Guardian's recent look at small businesses actually describes essentially the opposite phenomenon: smaller firms are using AI primarily to increase productivity while maintaining payroll, partly because they need the people and partly because this makes them more attractive employers.
There is a legitimate economic story underneath the Gizmodo article, though. If AI raises productivity faster than wages rise, the owners of capital can capture more of the productivity gain. That's a real distributional question. But it is quite different from saying, "Employers love AI because it scares workers out of asking for raises."
I'd put it this way: Gizmodo has mistaken one possible consequence of AI for its business case. Employers don't need a sinister motive. "This machine lets my employees accomplish more" has been a pretty compelling business proposition since the steam engine.
Exactly. And that makes the phrase “the stockholder class” rather less useful in the American case than it sounds.
There certainly can be a transfer toward capital owners when productivity rises faster than wages. But American employees are also unusually likely to be capital owners themselves. A worker with a 401(k), IRA, pension fund, or even an ordinary mutual fund is participating in that capital income.
There is still a distributional difference: a person with $20,000 in retirement investments isn't remotely in the same position as someone with $20 million. But the boundary isn't neatly workers versus shareholders. It's more like people with little capital versus people with lots of capital, with an enormous and rather important middle ground of people who are both wage earners and investors.
And there is another wrinkle: if AI substantially increases corporate profits, the resulting rise in stock prices benefits existing shareholders, while future workers may get some of the benefit through higher productivity and eventually higher real wages. So the timing of who gets what can be quite different even when everyone ultimately participates.
Which makes the Gizmodo framing especially odd. An American employee contributing to a 401(k) might simultaneously be the worker whose job is becoming more productive and the shareholder receiving part of the resulting gain. Capitalism does occasionally produce these wonderfully inconvenient categories.
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