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This article discusses the possible trajectory of income distribution in the United States amid the widespread adoption of generative AI. It reveals that the division of national income between workers and capital owners has been highly influenced by institutional settings, with the postwar growth in labor share linked to Keynesian policies, and its decline since the 1980s associated with neoliberalism. While generative AI raises concerns about job losses, the article argues that changes in production tasks are more likely to occur rather than lead to massive unemployment. The demand for younger, technically skilled workers could rise, potentially diminishing the role of middle management while benefiting tech companies and wealthy investors. To address the AI-driven decline in labor share, the authors advocate for a reevaluation of the relationship between technological progress and functional income distribution from the perspective of original institutional economics, prioritizing social provisioning and worker well-being over socially constructed institutions and hierarchies.
Supić et al. (Fri,) studied this question.