alt Hacker News> As automation takes over, the value of labor collapses
This is the reverse of how the economy actually works. You need labor and capital to turn raw materials into goods and services. If you invested a lot in capital in automation, you don't want that getting screwed up for want of labor, and so you pay a premium for workers who will do the job right and ensure you're getting full value from your capital.
That's why highly automated companies pay their employees better than less automated companies, and highly automated professions pay better than less automated professions.
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mitxela • yesterday at 11:07 PM
The value of labor has collapsed already, so it seems their theory is right and yours is wrong.
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There is a lot of reasons why automated companies pay more but it is usually to do with augmentation and the remaining skills required being higher on the skills pyramid and more scarce. Efficiency gains usually cause the next bottleneck to be hit requiring more skill and/or experience to fix (higher hanging fruit).
Usually the amount of pay increase no way compensates for the total pay lost across all workers - that's one of the incentives to continue with the efficiency gain of course. If it happens too fast only a select few will have jobs because the demand won't have time to match the new supply.
All the above assumes you need greater levels of intelligence to deal with the next bottleneck and that intelligence comes from humans as its only source. If AI is more intelligent than humans then this effect - known for most of human history - becomes an invalid assumption of the economic model; bottlenecks and the ability to solve them goes to the highest/cheapest intelligence.
IMV should AI do this it would invalidate most economic system assumptions including ones in capitalism, socialism, etc. My base case isn't a positive one sadly of what comes out on the other side.