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I'm thinking about the culture war around AI, specifically the whole UBI debate. If AI truly does take over a lot of human work, there's a lot of people who are savagely agitating for a UBI on one side, saying we'll be post work. The other side of course says no that's not how it works, besides we aren't even close to being able to afford that. The left (generally) takes the former, while the right generally takes the latter.
What I'm surprised by is why nobody has so far mentioned what, to me, seems the obvious compromise - we just shorten the work week! As our forefathers did forcing a 5 day, 8 hour work week, why don't we continue there? Go down to a 4 day work week, and/or shorten standard working hours to 6 per day?
If AI truly will obviate the need for a lot of work, how is this not the more rational solution than trying to magically create a UBI out of money we don't have? How come this idea has barely even entered the discourse? I have been talking and thinking about AI unemployment for years and never once have heard someone argue for this compromise.
This is obviously the correct solution. AI is going to reduce the need for human labour by increasing productivity; rather than transferring the fruits of this productivity to the owners of capital it's much better to transfer it to labour instead by mandating a three (or even two) day work week as standard on the same pay as before, thereby not only creating a lot of jobs to coutneract the job loss from AI but also helping people get more of their own free time.
I've long been a proponent of a forced average long term (over say 6 months) 40 hour work week for Investment Banks etc., sure they can make you work a 100 hour week when a deal is close but to make up for that they need to give you a week and a half off to rest and recover. If the IB wants to preserve its man hours it can simply hire a lot more people, it's not like there's a shortage of capable people who want to go in that area or they don't have the money to do this.
The reason this doesn't happen is simply because the people at the top want to maximize their "PnL per partner" which is an argument I've started to see as more and more bullshit over the years (if you're happy with a yearly $2 million PnL per partner you shouldn't be any less or more happy if the people in $RIVAL_BANK are making $0.5 million or $5 million in PnL per partner, anything else is just PnL envy and should be beaten out of you by the government).
A network of N people working on a problem requires at least order
logNoverhead to synchronize their efforts and receive instructions/feedback.So unless someone accepts working 75% time for 50% pay, they are gonna naturally scale to working more.
Fortunate log(N) grows really slowly compared to N. Doubling N only requires adding a constant amount of extra overhead regardless of how big your company is, which can easily be handled by big employers.
The true extra costs of doubling N is the doubling of the total salaries you'll have to pay out, not the O(log(N)) extra overhead and if AI increases productivity to the point where the former is viable then the increased costs of the latter will be easily covered by a few extra months of productivity gains, your argument is at best one that this transition might have to be delayed for a few months to account for overhead costs, not one that it's not feasible.
You're already getting O(N) increase in costs due to the extra headcount by paying people the same but working them for half as long, the O(log(N)) increase in overhead is a minor triviality compared to that.
Hold up -- I thought we're paying people proportionally -- folks at 4 days would be paid 80% of the current salary.
Otherwise what you're talking about is just an across-the-board 25% pay raise for everyone. And that, in turn, just further shifts things from labor to capital, which is (IIUC) the opposite of what you want.
Nope, I'm talking about people working 4 days but paid at the same amount they currently are. Yes, this means an across the board payrise per hour worked for everyone, which is affordable because AI is going to increase the productivity of everyone and rather than this boon being given to those who give people jobs (by e.g. them getting the same company output with half as many employees saving them payroll costs leading to more profit for them) we cut down the hours worked for ordinary people so the benefits of the productivity increase goes to them (by giving them an extra free day of their lives).
Now yes there are some jobs where a 4 day week isn't going to be possible so for them yes due to Baumol's Costs Disease they're going to end up getting paid more per current 5 day week than they are at the moment, for the exact same reason why the same coffee today costs more in Sweden than Turkey.
What does your favorite macroeconomic model say would happen if you raised everyone's wage 25% across the board? It can't be good for prices, either directly or via inflation.
There is a secret third option, which is that profit and wages both remain fixed, and the cost of the good/service provided goes down. This helps ordinary people* as they pay less for what they buy.
Indeed, in a competitive market, productivity gains spread through industries, and the same pressure pushes profit back down.
My favourite macroeconomic model requires competitive markets without monopolies trying to maintain their influence over the rest of society by restricting who gets to benefit from the latest tech advantages and at what price. Our current society is nowhere near my favourite macroeconomic model and we're not getting there any time soon.
It's like the Coase theorem when it says it doesn't matter for societal welfare who is given ownership over goods and services so long as transaction costs don't exist. In real life though transactional costs are very real and somebody trying to rely on Coase to justify why the boon from AI should be handed disproportionately to the owners of current capital would miss the point completely.
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