I'm always surprised by how unquestioningly people accept the idea that displacement from automation (or any other alternative to labor) will in the near term lead to *unemployment* (as opposed to just downward pressure on wages)
Labor markets are not exactly econ 101 S/D equilibrium, but not that far either. Unemployment rates have historically been ~5-10% through large changes in underlying economic fundamentals. If demand for labor decreases, wages decrease (or don't increase) and economy equilibrates.
Yes I know about sticky wages and recessions etc etc, I mean the long run. "Automation -> unemployment" types seem to be expecting durable long-run unemployment of a form that has not happened before
This is not saying that things will be fine, automation displacing labor can easily lead to inequality increasing. This is saying that 2/3 of population still doing OK and 1/3 being unemployed entirely is an unlikely story for *how* things will be not-fine.
Why isn't "automation will cause rising inequality so we should consider UBI" a fine enough slogan by itself? It seems more accurate.
In the longer term, as AI approaches super-human levels, this changes of course. But that era has even bigger challenges....
