When you use self-checkout machines in supermarkets and drugstores, you are probably not—with all due respect—doing a better job of bagging your purchases than checkout clerks once did. But such automation lets employers cut spending on labor in a way that has contributed significantly to income inequality in the US.
A new study coauthored by MIT economist Daron Acemoglu estimates just how much: replacing workers with technology “explains 50 to 70%” of the increase in inequality from 1980 to about 2016.
Acemoglu and coauthor Pascual Restrepo, PhD ’16, looked at US Bureau of Economic Analysis statistics on the extent to which human labor was used in 49 industries from 1987 to 2016—as well as data on machinery and software adopted in that time—alongside Census Bureau metrics on worker outcomes for roughly 500 demographic subgroups, broken out by gender, education, age, race and ethnicity, and immigration status.
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