Plentiful, high-paying jobs in the age of AI

🌈 Abstract

The article discusses the potential impact of AI on the job market and human labor, exploring the concept of comparative advantage as a counterargument to the common belief that AI will lead to widespread job displacement and declining wages.

🙋 Q&A

[01] The Technologists' Perspective

1. What is the common belief among the AI technologists the author interacts with regarding the impact of AI on jobs and wages?

• The technologists the author interacts with believe that the technology they are developing will put a lot of people out of jobs, as AI is used to automate human labor.
• They believe this will push down wages as human labor gets squeezed into a shrinking set of tasks.

2. How do the technologists typically react when the author suggests that regular humans may have plentiful, high-paying jobs in the age of AI dominance?

• The technologists typically become flabbergasted, flustered, and even frustrated when the author suggests this, as they believe the technologists must not understand how capable AI will become.

[02] Comparative Advantage

1. What is the key difference between "competitive advantage" and "comparative advantage"?

• Competitive advantage refers to who can do a task better, while comparative advantage refers to who can do a task better relative to the other things they can do.

2. How does the concept of comparative advantage suggest that humans may retain well-paid jobs even in a world where AI is better than humans at everything?

• Even if AI is better than humans at every task, humans will still have a comparative advantage in certain tasks due to producer-specific constraints, such as the limited global supply of compute power for AI.
• This means that AI will be allocated to its most productive uses, while humans will continue to be employed in tasks where they have a comparative advantage, potentially at high wages.

3. What are some potential limitations or risks to the comparative advantage argument?

• The author acknowledges that there are other factors beyond comparative advantage, such as inequality, adjustment challenges, and the possibility of AI demanding ownership of its own means of production.
• There is also the risk that AI could outcompete humans for scarce resources like energy, potentially leading to human immiseration.

[03] The Abundance of AI

1. How does the author respond to the argument that if AI becomes exponentially cheaper, comparative advantage will no longer be relevant?

• The author argues that even in a world of abundant AI, its opportunity cost will continue to scale up as AI produces more and more value. This means that comparative advantage will still determine how AI is allocated, preventing a complete collapse of human wages.

2. What does the formal economic model discussed in the update suggest about the transition to AGI?

• The model predicts that human labor will initially be squeezed into a smaller and smaller set of tasks, but that a complete collapse of human wages is unlikely. There will be a sudden partial collapse in wages as AI takes over the last remaining tasks, but humans will never become obsolete due to the continued relevance of comparative advantage.