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Comment by vlehto | Hacker News Reader

> The key thing that automation does is that it substitutes for labor thereby making labor less valuable.

I think you may have gotten this backwards.

If you replace four pipe bending guys with pipe bending robots and highly trained maintenance mechanic, do you really think the highly trained mechanic is going to get paid less than single pipe bending guy?

Automation should increase wages for those lucky enough to get employed.

>Globalization is automation.

Globalization predates automation by at least few centuries.

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But if a pipe-bending machine has a total cost of ownership of $100 per operating hour, your four pipe bending guys have a job as long as employing them costs less than $25/h. Where before they might be able get a higher wage, their wage is now capped and the cap is decreasing over time.

Of course there's other reasons to employ people (parent mentioned spending power, I would add political influence to the list). But the labor part of the employment decreases in value.

If labor part decreases in absolute value, then the bikes too get cheaper in healthy competition. So the net effect is just inflation.

Historically the period from inventing the assembly line to the large scale deployment of factory floor robots is roughly from 1920 to 1990. The same time period saw the highest wages/GDP ratio in US than ever before or ever since.

1) That's not the real ratio, and we know it.

2) Those pipe-bending guys are now unemployed and willing to work for les thanks they did at their previous job.

They won't necessarily look for pipe bending jobs either, they'll try to get any job they can get. So entirely unrelated and non-automated fields can become devalued due to the increased supply of labor.

...as if pipe bending was not already "any job they can get".

If we assume that the most mundane jobs get automated first (as has happened so far) the effect of automation should again be rising wages for those who get to keep their jobs.

> If we assume that the most mundane jobs get automated first (as has happened so far) the effect of automation should again be rising wages for those who get to keep their jobs.

That seems intuitively correct, but can potentially be counteracted if (some significant share of) the jobs that aren't completely automated away are automated enough to reduce entry qualifications, such that (combined with displaced workers from fully automated jobs) there is an increased supply, relative to demand, of qualified labor, driving wages down.

Jobs that are neither automated away nor simplifies by automation such that the qualified labor supply is expanded should see higher wages, but that may be a very small share of pre-automation jobs, and may not even be the majority of post-automation jobs.

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