The Shifting Fortunes of Automation

Technology didn’t depress wages—until it did. The hidden story in one macroeconomic indicator could explain why.

HERE’S A MYSTERY: Why is workers’ share of total economic output declining? If you think that’s been happening forever or that the answer is obvious, you’d be wrong. On the contrary, through most of the past two centuries of booms, busts, wars, and technological revolution, labor’s share of GDP stayed remarkably constant (around 65% in the U.S.). That finding, when first unearthed decades ago, surprised everyone. British economist John Maynard Keynes

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