Economists Pin More Blame on Tech for Rising Inequality
Yet the technological shift evolved as growth in postsecondary education slowed and companies began spending less on training their workers. “When technology, education and training move together, you get shared prosperity,” said Lawrence Katz, a labor economist at Harvard. “Otherwise, you don’t.”
Increasing international trade tended to encourage companies to adopt automation strategies. For example, companies worried by low-cost competition from Japan and later China invested in machines to replace workers.
Today, the next wave of technology is artificial intelligence. And Mr. Acemoglu and others say it can be used mainly to assist workers, making them more productive, or to supplant them.
Mr. Acemoglu, like some other economists, has altered his view of technology over time. In economic theory, technology is almost a magic ingredient that both increases the size of the economic pie and makes nations richer. He recalled working on a textbook more than decade ago that included the standard theory. Shortly after, while doing further research, he had second thoughts.
“It’s too restrictive a way of thinking,” he said. “I should have been more open-minded.”
Mr. Acemoglu is no enemy of technology. Its innovations, he notes, are needed to address society’s biggest challenges, like climate change, and to deliver economic growth and rising living standards. His wife, Asuman Ozdaglar, is the head of the electrical engineering and computer science department at M.I.T.
But as Mr. Acemoglu dug deeply into economic and demographic data, the displacement effects of technology became increasingly apparent. “They were greater than I assumed,” he said. “It’s made me less optimistic about the future.”
Mr. Acemoglu’s estimate that half or more of the increasing gap in wages in recent decades stemmed from technology was published last year with his frequent collaborator, Pascual Restrepo, an economist at Boston University. The conclusion was based on an analysis of demographic and business data that details the declining share of economic output that goes to workers as wages and the increased spending on machinery and software.
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