So maybe it’s time for a quick history lesson about the first couple industrial revolutions, with the labor force going through what leaders such as Nvidia’s Jensen Huang have described as another one: the AI boom.
And this pause may be happening again, almost exactly 200 years later.
For decades, the economy expanded without delivering much improvement to the people actually operating the machines; industrialists grew fabulously wealthy while new factories stretched across the landscape, but workers still toiled for 14 hours a day in crowded conditions, unable to find a better job. The gains from technological progress accrued overwhelmingly to the owners of capital. Only later—once brand-new industries, like typing and manning phones, demanded more skilled labor, and political institutions shifted to meet that demand—did wages finally start to rise alongside productivity.
“It remains to be seen whether wages and salaries recoup some of their lost ground relative to corporate profits,” the researchers wrote.
Put those two trends together, and the math points in one direction: higher productivity per worker.
“The productivity revival is not just an indicator of the power of AI,” Brynjolfsson wrote. “It is a wake-up call to focus on the coming economic transformation.”
“For now, higher profits relative to wages are yet another driver of a K-shaped economy,” BofA wrote.
