[JohnFen]

> people will need to shift to these other jobs that AI can't do.

And why do think that there will be enough of these other jobs for everybody?

The funny thing is that when automation caused a large loss of blue-collar jobs, the answer was "just retrain for white-collar jobs". Now that it looks like there's a real threat to white-collar jobs, the answer is "just retrain for blue-collar jobs?"

Something is very wrong here.

[binarybits]

I discussed this in the final section: "The level of employment across the economy is ultimately driven by macroeconomic factors: If consumers spend more money, then businesses will respond by hiring more workers. The last three years have illustrated how powerful this can be: In the wake of the pandemic, Congress and the Fed worked a little too hard to boost the economy, producing a super-tight labor market and rising inflation. If AI starts replacing workers in the coming years, that will put downward pressure on wages and prices while growing the economic pie. That will give the Fed more leeway to cut interest rates and give Congress more room to raise spending or cut taxes. As long as Congress and the Fed are doing their jobs, there’s no reason for the total number of jobs, economy-wide, to decrease."

[pixl97]

>If consumers spend more money, then businesses will respond by hiring more workers.

Unless they can expand by spending capital instead. Workers are an expensive long term liability. This is why in every industry that has been able to automate at a cost 'around' human labor or less has. You don't harvest wheat with 100 people with scythes, we invest huge amounts in to capital intensive combines that can do the work of a few hundred people. At the same time, some fragile fruits have not been well automated yet, and we use unskilled low paid labor to do work like that.

What you are not doing is answering the question of "What will happen if we can automate a significant fraction of white collar labor"? Blue collar work moved to the service/information industries for higher pay. If that market shrinks, there is not any other high paying skill based market for these people to move into that I know about.

It is highly possible we could see general wage suppression. Plenty of jobs, very rich companies enriched by the control of AI, not plenty of pay. Now just contemplate the economic problems that's going to cause.

[JohnFen]

> If consumers spend more money, then businesses will respond by hiring more workers.

No, they won't unless there's no other option. If AI works out as proponents are dreaming it will, there will be another option.

Also, if there's a large amount of unemployment, how will people spend more money?

[PeterisP]

If consumers spend more money, then economies of scale increase, which makes it more attractive for companies to increase supply with extra capital investment in automation instead of more labor.

[bradjohnson]

>If consumers spend more money, then businesses will respond by hiring more workers.

That is not how economics works...