San Francisco, CA - November 18, 2024 - New analysis from Amicus AI Advisors, LLC highlights a significant shift in U.S. labor productivity, driven by the rapid adoption of generative AI technologies. As inflation concerns persist, this trend suggests the potential for sustained wage growth, signaling a promising development for the economy.
At last Thursday’s rate cut press conference, Federal Reserve Chair Jerome Powell noted, “If we see productivity more sustainable at these high levels, then that would sustain higher wage gain.” This follows a notable 2.3% surge in U.S. labor productivity in Q2 2024, which surpassed expectations.
Amicus AI Advisors draws historical context from Nobel Prize-winning economists Daron Acemoglu and Simon Johnson: “US median real wages (hourly compensation) grew at above 2.5 percent per year between 1949 and 1973. Then from 1980 onward, median wages all but stopped growing.”
Economist Robert Solow famously summarized this paradox: “The computer age was everywhere except for the productivity statistics.”
Their analysis shows a turning point. For decades, computers struggled with many routine intellectual tasks, limiting their impact on overall productivity. However, generative AI is now bridging this gap, democratizing access to advanced problem-solving across a wide range of industries. This transformation enables even non-technical workers to complete complex tasks, significantly boosting productivity.
“With higher productivity, we can expect wages to rise,” says Dr. Leonidas Tam, Chief Investment Officer at Amicus AI Advisors. “Much like the 1950s and 1960s, when balanced investments in automation maintained a stable labor share of income, generative AI is poised to foster a new era of balanced growth.”
Acemoglu and Johnson reinforce this point: “As a result of the broadly balanced investments in automation and new tasks in the 1950s and 1960s... labor share of income in manufacturing remained broadly constant, hovering close to 80 percent between 1950 and the early 1980s.”
Amicus AI Advisors determines that companies leading with AI, integrating new tasks and capabilities, are well-positioned to replicate this balanced growth, ushering in a modern era of shared prosperity. By strategically deploying generative AI, businesses can boost productivity while ensuring equitable wage increases, realigning the relationship between capital and labor.
About Amicus AI Advisors, LLC
Amicus AI Advisors, LLC is a premier research firm specializing in AI-driven economic analysis and strategic advisory services. Leveraging cutting-edge AI technologies, the firm delivers actionable insights, helping clients navigate complex market dynamics and capitalize on emerging trends.
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