The impact of the “Digital Revolution” on structural unemployment and the distribution of income
There is an interesting debate as to whether or not the technological changes taking place, which are similar to a second industrial revolution, will ultimately benefit everyone or not.
Some argue that robots and 3-D printing etc will make our lives easier and goods cheaper. We can all gain,
However, others consider that many (particularly those in the professional middle classes) will ultimately be worse off, because the types of jobs done by lawyers, accountants, doctors and even teachers (!) can be done more efficiently by computers. Apparently, algorithms are being developed which can mark essays or diagnose illnesses more accurately than people can.
Consequently, perhaps those careers will no longer be available and many of us will suffer structural unemployment.
The other concern is that the distribution of income will widen. As capital is substituted for labour, wages will fall and those who own the capital (for example, shareholders and CEOs of firms) will get greater returns. Actually. perhaps this is happening already and could be part of the explanation for the widening distribution of incomes in many countries, including Japan. It is also in line with Thomas Piketty’s argument that when r > g (the rate of return on capital is greater than the growth rate of real GDP), incomes will become more unequally distributed.
I wonder which viewpoint you agree with.