Question

As employment polarized, what happened to wages? Why did this happen?
Based on this analysis, what do you think will happen in the labor market if automated driving becomes a reality?
How will machine learning impact the labor market? Any guesses? Please answer in a 1000 words

Answer 1

With the polarization of employment in the recent years, it has been observed that wages of high skilled workers have risen at an alarming rate while the wages of low and middle skilled workers have declined. This has increased disparity in the level of the wages in the country. While high skilled workers are getting more wages, the middle and low skilled are getting less wages. This polarization has impacted the medium and low skilled workers adversely reducing their wages.

If automated driving becomes a reality , then this will lead to fall in the overall labor demand as number of medium and low skilled workers are more in comparison to high skilled workers. Thus, fall in the labor demand of low skilled workers will reduce their wages further and increase the wages of high skilled workers and thus increasing the disparity among the wages further.

Machine learning will also have same impact as capital will be substituted for labor and thus demand for labor in the market will decline which will lead to fall in the wage rate of the low skilled workers.

Thus, polarization has increased overall wage disparity among the workers.