[fny]

"air traffic controllers were paid a median annual salary of $132,250 in 2022, or nearly four times the $33,380 median annual pay of crossing guards"

It's not quite "expertise" that justifies the wage gap, it's supply and demand. Almost anyone can be a crossing guard--not everyone can be an air traffic controller. If AI theoretically could make anyone an air traffic controller, one would expect the salary to collapse as well.

Additionally, the notion of a middle class relies on a wage differential. If AI levels the playing field so dramatically, the notion of middle class will entirely evaporate since everyone's purchasing power equalizes.

[bumby]

Likewise I think the author makes the same error elsewhere. TFA states:

>The contemporary challenge is the high and rising price of essential services like healthcare, higher education and law, that are monopolized by guilds of highly educated experts.

The rising cost of education and healthcare are not exactly going to the "guilds of highly educated experts" as much as they are ballooned by second-order effects from an overly complicated system. For example, the higher cost of education is not going to professors as much as it's going to the administrative costs as colleges continue to compete for a growing supply of students willing to pay (in part because the mass availability of student loans allows them an extensive line of credit and also because the labor market makes it seem like they must get a degree to be competitive).

[Swizec]

> If AI levels the playing field so dramatically, the notion of middle class will entirely evaporate since everyone's purchasing power equalizes

We can study this by looking at examples!

Slovenia (where I'm from) has the 3rd lowest gini index in the world[1]. Meaning we are the 3rd most egalitarian country in the world with close to zero income inequality.

You would think this is fantastic, but in practice it means everyone's equally poor-ish. There's a lot of talent drain. Everyone in my millenial generation that's great at their job has either moved out of the country, works remotely for foreign companies, or has built a business that primarily targets foreign markets. They're starting to build a proper middle class, but there's nowhere for their money to go.

There aren't enough higher middle class folk to support all the services they'd want. So the extra money goes to foreign companies or into inflated real estate that has become unaffordable to anyone employed locally.

And there are no rich people to tax or ask for philanthropy to break the status quo. A net worth of ~$20mil puts you on the list of top 100 richest Slovenians as of 2023. Most of them made their money abroad and have also moved their wealth out of the country to avoid high taxation.

The concept of "upwards mobility" is barely worth talking about.

[1] https://en.wikipedia.org/wiki/List_of_countries_by_income_eq...

[mitthrowaway2]

I'm very eager to understand this. If there are no rich people to tax, then who owns the unaffordable real estate?

[Swizec]

> If there are no rich people to tax, then who owns the unaffordable real estate?

People like my mom who bought their place 20 years ago. Or like my grandparents who bought their house 50 years ago.

But there's not enough new investment to increase supply. In large part because there aren't enough people with liquid wealth to provide said supply.

And none of the people who bought decades ago are selling because they need somewhere to live and can't afford to buy at current prices. Any gains they've made would be immediately eaten away by the new purchase.

You couldn't do something like a wealth tax on these people because they have very little cashflow to pay those taxes with. And it's not like they aren't using their homes, so an under-use tax wouldn't work either. You could try a land value tax, but again there's no cashflow to collect that from and nowhere for these people to go if they're forced to sell.

[golergka]

People who don't have income and other taxable economic activity in the country.

[pydry]

If they have any interest in the country, they have taxable activity.

Whether the government wants to tax it is a different question. Usually they do not.

[golergka]

That's how you make people lose interest in the country — exactly what OP is complaining about. If you want to stop brain and capital drain, taxation should be the last thing on your mind.

[bumby]

There's a tipping point though, right? I think the right question is, how do we find the correct threshold?

Otherwise, there will be an asymmetry in which the "brains and capital" will get all the benefits of taxes with little to no skin in the game. That implies society serves the economy and not the other way around.

[Swizec]

> Whether the government wants to tax it is a different question. Usually they do not.

We're talking about a formerly socialist European country here. Not everywhere is USA :)

Income tax in Slovenia goes up to 50% and VAT (similar to sales tax) is an eyebleeding 22%. Capital gains taxes can be as high as 25%. Slovenia is not afraid to tax people don't worry.

https://spot.gov.si/en/info/taxes/taxes/

[xyst]

Right. Instead of many people in a business (ie, accountants, lawyers, product owners, software engineers). The “workforce” can theoretically be reduced to specialists within a field:

- “prompt engineer - accounting” who has vast history of accounting practices

- “prompt engineer - lawyer”. No more farming out writing up complicated EULAs to Skadden. Have your general counsel do all of this for you with the help of “AI”. Or maybe have an IPO prepared without the help of a middleman such as “JPM” or “Goldman Sachs”. Billable hours drop significantly.

- “prompt engineer - swe”. Instead of multiple teams of engineers. Have “Devin” scaffold out the basic application while you focus on architecting an end to end solution.

All of those “middle class jobs” once held by mid tier specialists have evaporated.

[sublinear]

I don't know enough about the other disciplines, but the SWE one would be the other way around and serially dependent. The architecture comes first and then the implementation details can be handed off to the prompt engineer.

Then the code review will still require a human senior developer and maybe the architect. The testing after that can be fuzzed by AI but will still need to be confirmed by a human senior QA specialist.

In other words, AI can lower the bar for entry level work (not by much), but it does not eliminate or create any new jobs. It's very similar to what search did for entry level work. Search results "powered by AI" are also over a decade old.

[dghlsakjg]

This has been my impression overall with AI so far as someone with Senior in their title.

AI is very good at doing things that can be unit tested, or doing small implementation details.

It falls flat on its face when you ask it to understand architectural patterns, or even reference other classes/modules in a broader codebase.

The hard part about coding is rarely the code, more often it is understanding the human side of things, and how you can fulfill real world needs of users.

[robjan]

I think it actually replaces an army of junior engineers or your offshore development house. The real engineering continues while the grunt work is farmed out to AI. It also kills the junior engineer since there will be years where they are less valuable than something with a marginal cost close to zero.

[asdff]

It will be interesting to see what of two possibilities happen: mass unemployment or simply more bullshit jobs and steady state employment. I imagine when computers hit the scene people had the same feelings about losing their accountants and human calculators and secretaries and what not, yet there is not a huge population of out of work people, people are doing different roles. You might even argue that while a total headcount per business might go down, it might be balanced by more businesses emerging. Considering the Fed's dual mandate they might opt to incentivize bullshit job growth over some great society reset to either mass unemployment or a basic income utopia.

[Eddy_Viscosity2]

You see this all the time. Like college degrees for example. They did studies that showed if you got a university degree you would earn X times more than someone who didn't. But that was only the case because a relatively small percentage of people did go to college. Once EVERYONE has a college degree, this doesn't work anymore.

[dghlsakjg]

College degrees is a bad example to use. Even today, a bachelors degree is highly correlated with a massive earnings boost compared to a high school only education.

Sources: https://fred.stlouisfed.org/graph/?g=1jqzJ

[adamtaylor_13]

I doubt that's the intrinsic value of the degree (a la supply and demand), but rather the mindset, social-economic status, and background of someone that goes to college. (At least in the US)

[adamredwoods]

While having a strong position in social-economic class is indeed influential, data shows even an associate's degree helps increase long term salary.

https://nces.ed.gov/programs/coe/indicator/cba/annual-earnin...

[Eddy_Viscosity2]

Exactly this, the degree is used as a proxy for the actual qualities that employers for certain higher paying positions are screening for. But that's not what they tell you. They tell you that 'having a degree will get you a high paying job'. This stops being the case if the everyone has a degree and the proxy relationship no longer works. The honest thing to say is have the correct "mindset, social-economic status, and background" and you will get a high paying job.

[Eddy_Viscosity2]

If every single high school graduate then got a bachelors degree, would their median earnings match the median earnings of the of the bachelors degree group now? It doesn't seem likely. Otherwise we can just mail every single person a bachelors degree certificate in the mail and watch the salaries increase, productivity sore, the economy on permanent boom!

[philipkglass]

500 years ago literacy commanded a substantial "skills premium" on earnings relative to the larger illiterate population. Today most people in the work force are literate and literacy is not a distinguishing quality for higher earnings. But on a societal level, I don't think that developed nations could be as prosperous as they are today if literacy were as uncommon now as it was 500 years ago.

To relate this to your bachelor's degree example, if everyone earned a bachelor's degree in e.g. physics then the earnings premium for STEM graduates would drop if not vanish. But I expect that society's collective material prosperity would increase. I say "earned" rather than "got mailed a certificate" because getting a certificate without developing the corresponding abilities is not useful.

[dghlsakjg]

The bachelors degree is not a piece of paper in the same way that a long resume is not the same as experience gained. Either is useless if they are not representative of an underlying truth.

The point of the experience is that it allows you to produce more value with the same inputs.

To wit: nations with higher educational attainment do not see the averaging that you suggest, instead they see rather remarkable standards of living.

[bumby]

I think the real question is: how much of the degree is a signal and how much is an actual increase in knowledge/ability? I know since economists have done work on this and, to my memory, it’s split about 50/50.

If it slides too far to the signal side, it becomes a bad proxy. Considering grade inflation is a thing, I wonder how much of that relationship gets eroded

[lancesells]

Don't you think it's correlated to the person having an education and skillset that someone who didn't earn the degree would normally not have?

[Eddy_Viscosity2]

Of course I think that education matters and is the important thing here. But employers require a degree (i.e. the piece of paper) so that's the thing they are using as a proxy and so that's the thing that may decide whether you get a job (or even an interview).

[mock-possum]

Plus if you have the means to attend college to begin with and then the drive and discipline to graduate, chances are you will also have the resources to establish a career.

[mhh__]

> Supply

https://www.tracingwoodgrains.com/p/the-faas-hiring-scandal-...

[cyanydeez]

We could easily bring back the middle class by.capping public corporation CEO pays.

We choose yo ignore wealth ineqaulty for delusional reasons

[mschuster91]

> Additionally, the notion of a middle class relies on a wage differential. If AI levels the playing field so dramatically, the notion of middle class will entirely evaporate since everyone's purchasing power equalizes.

Yup, and that is going to be the defining problem of the next decade - IMHO even more than climate change and most other environmental issues.

The lower classes aren't going to be threatened by AI, not for a looong time until we get "I, Robot"/Star Trek TNG Data-like robots with precision dexterity comparable to a human. The jobs they do aren't automatable at all, have been automated long ago so it's not an issue any more (most of manufacturing, mining) or human labor will be cheaper than a robot replacing it (which is sad enough - shouldn't automation actually free the masses from toiling in hard and rewardless jobs?).

The higher classes (depending on definition, usually the 1-10 top % of wealth) aren't going to be threatened by AI either. Those who have the money have the power after all, and almost everyone with a fully paid off home and a second one to rent out should be set even for the worst cases.

But the wide masses? Realistically, as you said most of them will fall to lower classes in income and lifestyle, and a very few luckshotters (="AI prompt engineers") manage to raise up. We've seen in the last decade or so just how powerful and reactionary the search of these masses for a scapegoat for their externally-caused misfortune can be, and it can take on a lot of different forms: nationalism to far-right xenophobia, antisemitism, anti-muslim, anti-intellectual ("antivaxxers", a ton of "homeschoolers")... that's a lot to take on even for a stable society, and external influence (enemy nation propaganda, financially motivated propaganda such as the Macedonian troll farms hunting for ad placements, domestic media moguls) makes it even worse.

Honestly I have zero idea how the fuck humanity is supposed to continue to exist as a civilization longer than 10-20 years. Even the best of our democracies are falling apart not just at the fringes (you always had and will have loons) but in the center.

[bumby]

Alarmism aside, there are ways to mitigate this outcome. Take your comment:

>or human labor will be cheaper than a robot replacing it

One option is to create an automation tax, which makes human labor more competitive while also supplanting the income taxes that are lost due to automation. That's just one example, but like so many problems that are of man-made origin, there are also potential solutions of man-made origin. They are not natural laws.

[Nevermark]

> One option is to create an automation tax

Since everything is going to get automated, this is one of the more complex ways of getting to the same place: industry taxes that pay for a universal income.

My take is just as radical, but makes more philosophical and moral sense (to me).

All newly discovered non-human made resources are considered a common inheritance. Industry (whoever) gets bounties for discovery, and bids to extract, with that money getting distributed to everyone evenly.

What I like about it: inheritance is considered a moral transaction, joint inheritance of the planet is an ideal we often give lip service to, flat distribution does not favor or disfavor anyone, and this distribution method doesn't take anything from anyone (after a gradual transition to the new regime).

The value of total natural resources extracted is going to increase over time, even as unit pricing goes down. Access to resources beyond Earth will give the value of new resources a big boost.

Something will have to radically change, regardless.

[mschuster91]

> One option is to create an automation tax, which makes human labor more competitive while also supplanting the income taxes that are lost due to automation.

As if those in power would ever agree to such a thing. "Trickle down" is a myth, US Congress has been gridlocked for decades, and most other parliaments in the world are so infested with lobbyists that you will not ever see an automation tax without widespread violent unrest. People living outside of democracies have it even worse.

There are zero signs that democracy is capable of fixing the issues at hand, it's all just too damn corrupt, and fighting for utter and bare survival against the rise of authoritarianism. Yes, you sometimes have "social democrats" gain power (or authoritarians getting booted off their posts like PiS in Poland or what will sooner or later happen to Erdogan and Netanyahu), but they spend almost all of their political energy on undoing the worst "accomplishments" of their predecessors, and all too often get booted themselves by a population unwilling or financially unable to go through change (as we're seeing in Germany).

[dmurray]

Well, we can also say that we expect air traffic controllers generate at least their $132k/ year in value. Crossing guards seem to have a similar role and in theory could be generating the same value, but at the margin they're probably not - you'd expect hiring another one would be worth some significant fraction of the $132k to railway companies, but they're not competing to hire more of them.

So if AI enables every unskilled worker to produce $132k of value instead of $33k, who gets the $99k surplus? Marxist economics teaches us that in a capitalist society, without additional state intervention, the employer gets all of it. Too bad for the worker.

The good news, though, is that most labour economists wouldn't go as far as Marx. In modern societies the working man seems to get at least some benefit from productivity gains that don't come directly from him working harder. And even if you do believe Marx, note the caveat about "without state intervention". The modern state has many tools to intervene and is not afraid to use them: taxes, minimum wage laws, mandating bullshit jobs. In this scenario, doubling minimum wage wouldn't hurt economic productivity - the workers are all producing $132k of value, so not a single one will be laid off if they need to be paid $66k each.

Of course, there are some coordination problems to solve...

[bumby]

>we can also say that we expect air traffic controllers generate at least their $132k/ year in value

This is an important distinction that the author misses. People are paid according to their value to the economy, not their value to society. So, even if the jobs were similar in expertise, the crossing guard would likely not make as much because the ATC provides more to the economy.

*FWIW, I'm not saying this is moral or fair, it's just is the way the economic cookie crumbles.

[firstplacelast]

Disagree. People are paid based on value-extraction, not value-generation. They are correlated, but are vastly different metrics.

[bumby]

Care to elaborate on the details of the distinction? I think I get the gist, but I’m not sure how much it matters in practice (given the above comment about leverage).

E.g., a hedge fund manager is paid handsomely for if they extract value, but that same extraction is value generation for their clients. It feels like two sides of the same zero sum coin.

[pydry]

Nobody is paid according to their value. They are paid according to their leverage.

PhDs provide an immense amount of value but have very little leverage.

Workers who unionize and use their power effectively have more leverage than those who do not.

Land owners contribute precisely 0 value but hold leverage in the form of a legal title.

[bumby]

I would agree, but your statement makes it sound as if they are disjointed. You need to have both.

(I would also push back a bit that a PhD adds immense value. Many that do get paid well via IP and start-ups, but that’s a better interface with the economy. There are many in my experience that add little more than a credential)

[pydry]

>You need to have both.

For employment the most it does is set a ceiling on wages. Pushing up your ceiling doesn't necessarily push up your wages.

>I would also push back a bit that a PhD adds immense value.

Of course, that's a common opinion. Blue sky research is vastly underrated in the west. This is partly why the Chinese are overtaking us.

[bumby]

>Blue sky research

I’m not discounting fundamental research in the way you may be implying. I’m just saying it has little economic value until it has an application. By definition, it doesn't have an economically marketable use, so it can't have economic value.

I also don’t think China is overtaking the US on a research front. They publish a lot (although I would question how much 'blue sky' vs. derivative), but that’s a bad metric for a lot of reasons.

[mschuster91]

> In modern societies the working man seems to get at least some benefit from productivity gains that don't come directly from him working harder. And even if you do believe Marx, note the caveat about "without state intervention". The modern state has many tools to intervene and is not afraid to use them: taxes, minimum wage laws, mandating bullshit jobs.

That may have been the case 30, 40 years ago in the US. In reality, the minimum wage in almost the entire US (unchanged since 2009, to add!) is not enough to afford to have a family [1]. Companies and the ultra rich aren't taxed shit - when you have people like Warren Buffett calling to tax him and his ilk more [2], it's obvious that the situation is clearly out of control.

[1] https://www.investopedia.com/terms/l/living_wage.asp

[2] https://www.reuters.com/article/idUSBRE8AP0LZ/

[golergka]

Why would you expect a person to be able to afford a family on minimum wage? Why would you even want that?

If you raised a minimum wage to that level, you would eliminate a lot of low-level jobs completely, and leave people who don't aspire or need this non-trivial level of achievement without jobs.

[mschuster91]

> Why would you expect a person to be able to afford a family on minimum wage? Why would you even want that?

Society needs children to survive - someone has to pay the pensions after all, at least in common "societal contract" systems, otherwise people will have to literally work until they die.

For that in turn, society needs at least a replacement fertility rate, and usually there is a close negative correlation between wealth and amount of children (i.e. the wealthier people get, the less children they have), so it makes sense to strengthen the ability particularly of the lower classes to have children.

[golergka]

> Society needs children to survive

This is true. However, what society definetly doesn't need is

> the ability particularly of the lower classes to have children

That's how you breed poverty and other systemic problems that you later have to deal with. People should only have children when they can afford to invest into real care for them. If a person earns a low wage, he shouldn't be able to afford children because he shouldn't have them.

[mschuster91]

> If a person earns a low wage, he shouldn't be able to afford children because he shouldn't have them.

The right to found a family is enshrined in Article 12 of the European Convention on Human Rights [1] and Article 16 of the Universal Declaration of Human Rights [2].

I agree it's a bit of a stretch, but at least the UDHR definition explicitly states that "the family is the natural and fundamental group unit of society and is entitled to protection by society and the State"... for me, that clearly implies economic protection, i.e. a society has to make sure that people can actually exercise that right - because how useful is a theoretical right to something (be it to found a family, or to have the right to due process and fair treatment before the courts, or whatever else), when large swaths of the population cannot exercise that right, or have access to it effectively denied by circumstances outside of their but inside the government's control?

[1] https://www.echr.coe.int/documents/d/echr/convention_ENG

[2] https://www.un.org/en/about-us/universal-declaration-of-huma...

[holoduke]

Yes. Most people will be seen as unneeded occupants by the rich elite. A world with only a few million is desired by them. Workers are no longer needed. Low and middle class people are waste.