This extremely interesting article in Medium ‘The Robots Have Taken Over (Our Brains)‘ offers quite a different view of the impact of technology on wages and well being.
The well documented Baumol’s cost disease shows that when “real wages in low productivity industries actually rise like those in high productivity industries, as workers leave low-productivity industries for higher productivity industries. This simultaneously increases their income, as well as forces the employers in the lower productivity industries to raise salaries to retain and attract replacement labour.”
Further, the author view is that “what Baumol called a dilemma, and what we have come to describe as a disease, is actually precisely the salve for technological productivity gains to be distributed, even to parts of the economy that aren’t experiencing productivity growth. The real disease would be if Baumol’s dilemma didn’t exist?—?but it does.”
Therefore when looked at the global level, technology creates an improvement of well being for the entire society by an induced redistribution of wage and thus value. The author explains the apparent dilemma of lower apparent wage growth versus productivity observed in recent years.
This is an interesting subject which shows that we don’t still quite understand what happens when such a transformation happens like the Fourth Revolution.
