The prospect of transformative and disruptive advances in generative Artificial Intelligence (AI) has raised major concerns about future labour markets and economic inequality. A new CEPR Policy Insight by MIT professors Daron Acemoglu, David Autor and Simon Johnson emphasises that the impact on inequality hinges on how AI is developed and applied, underscoring the importance of strategic public policies to promote skill development and steer technology in a positive direction.
The evidence suggests that the private sector in the United States is currently pursuing a path for generative AI that emphasises automation and the displacement of labour, along with intrusive workplace surveillance. As a result, disruptions could lead to a potential downward cascade in wage levels, as well as weak productivity gains.
However, the authors argue that there is a viable alternative approach, where generative AI can enhance human abilities, but this necessitates changes in direction for technological innovation and corporate practices. The objective should be to utilise AI to create new job roles and enhance skills for workers such as teachers, nurses, technicians, electricians and plumbers, which would decrease inequality, enhance productivity, and increase wages by elevating workers’ expertise.
The authors suggest five key government policies to consider:
Overall, the positive impact of generative AI on work and workers is uncertain, as current biases in the tax code, private sector, and tech industry favour automation over augmentation. However, this Policy Insight illustrates an alternative route that could generate new roles, elevate skill sets, and enhance productivity.
