Fed's Cook Sees Signs of AI Improving US Labor Productivity 85
The use of AI in the economy presents many unanswered questions for policymakers though there is some evidence that it could improve labor productivity, according to Federal Reserve Governor Lisa Cook. From a report: "The impact of AI on the economy and monetary policy will depend on whether AI is just another app or something more profound," Cook said in remarks prepared for delivery at the National Bureau of Economic Research's conference on artificial intelligence in Toronto Friday. "Empirical evidence is still patchy, but there is work showing that generative AI improves productivity in a variety of settings."
Cook, the first Black woman to serve on the Fed's board, was among central bank officials who on Wednesday voted unanimously to hold rates steady in a range of 5.25% to 5.5%. President Joe Biden named Cook as a governor on the board last year. She was endorsed for a full 14-year term in a 51-47 Senate vote earlier this month. Cook predicted that greater use of AI will be similar to the spread of computation in the workplace and could present "a difficult transition for some workers. [...] Any large change in the labor force will generate disruptions and challenges that will need to be addressed to help workers adapt and thrive."
Cook, the first Black woman to serve on the Fed's board, was among central bank officials who on Wednesday voted unanimously to hold rates steady in a range of 5.25% to 5.5%. President Joe Biden named Cook as a governor on the board last year. She was endorsed for a full 14-year term in a 51-47 Senate vote earlier this month. Cook predicted that greater use of AI will be similar to the spread of computation in the workplace and could present "a difficult transition for some workers. [...] Any large change in the labor force will generate disruptions and challenges that will need to be addressed to help workers adapt and thrive."
Great! (Score:3, Informative)
Don't forget... it used to be that one man could get a job out of high school that would allow him to get married, own a house, have children, start setting a little aside for retirement AND take some weeks of vacation a year, all by the time he was 25. This is not impossible or unachievable, it was taken away from us, bit by bit.
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Be part of the ownership class.
Own stocks. Be a business owner. Start your own company.
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Be born a billionnaire
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Yeah, always people out there trying to discourage you. Saying you have to a billionaire or be born into it.
Truth is anyone can do it.
Don't listen to these people who want you to wage-slave and not own anything.
Re: Great! (Score:2)
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Anyone can be a business owner. Just go buy some stock and congratulations, you're a part owner of the business.
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That's a very weird definition of owner. You don't have legal responsibility for what the corp. does until you own over 10% of the stock...so the law doesn't think of "stock holding" as being a business owner.
Still, stock index funds have a good track record as better than most other ways to store your money. ... If you've got any surplus money to store. Which doesn't apply to most high school grads.
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"Be a business owner" has strong "draw the rest of the owl vibes". Yet plenty still try and fail, emptying their savings and that of their FFF. You mean be a _successful_ business owner.
If you get sucked into MLMs or online crypto dropshipping online-course crap as your business then maybe not owning anything is better. That bimonthly salary limits the damage you can do but people still take on debt and credit card debt!
I know MLM hucksters and such prelude their pitches with similar ideas. There are always predators and parasites everywhere and so, use those millions of years of evolutionary skills to go around them.
We're human beings with intellegence. We have to figure shit out. If ther
Re: Great! (Score:2)
Was the original comment factual or not?
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No.
Most billionaires are self-made.
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it used to be that one man could get a job out of high school that would allow him to [live]
I'm pretty sure that's still the case.
We just have to find that one man, he has to exist somewhere!
Re: Great! (Score:2)
Re:Great! (Score:5, Informative)
it used to be that one man could get a job out of high school that would allow him to get married, own a house, have children, start setting a little aside for retirement AND take some weeks of vacation a year, all by the time he was 25.
That is a myth.
Average job tenure is higher today than it was in the 50s and 60s. Home ownership is at the same level while the average house size has doubled. Wages for high school graduates are about the same when adjusted for inflation, and much better for those with more education.
Sure, some people got good jobs out of high school, and some people still do. But most people didn't.
Re:Great! (Score:4, Insightful)
Home ownership rate is entirely misleading.
What's important is the percentage of adults that live in a dwelling that they own. That has shown significant decline.
From https://en.wikipedia.org/wiki/... [wikipedia.org]:
"The name "homeownership rate" can be misleading. As defined by the US Census Bureau, it is the percentage of homes that are occupied by the owner. It is not the percentage of adults that own their own home. This latter percentage will be significantly lower than the homeownership rate. Many households that are owner-occupied contain adult relatives (often young adults, descendants of the owner) who do not own their own home. Single building multi-bedroom rental units can contain more than one adult, all of whom do not own a home. "
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Mmmh....valid points. I remember being shocked when I saw a log cabin. But part of the problem is that there isn't any "unseated land" anymore to build your house on. Not that's livable. (There might be some in some areas without accessible water.) That's the reason there are so many homeless. People used to only be homeless by choice (as in, e.g., following the jobs or some other resource).
OTOH, building codes, while they keep many from having a home, also reduce urban fires. Chicago and London are
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You are off a bit with the "by 25". For most it was "by 30".
But I agree, the top 2% took almost *all* the productivity gains for the last 40 years.
And when do we see any of that rewarded? (Score:4, Interesting)
We hear a lot about productivity increase, productivity increase... why the hell should I celebrate that, I ask?
In the past 50 years, productivity per worker hours went up 200 to 1000 percent. Everyone produces at least twice, in some cases ten times more than half a century ago. Yet wages stagnate and are, in terms of purchasing power, lower than 50 years ago.
Why should anyone celebrate that? Why should I give a fuck about productivity if the best outcome I could hope for is none at all. At worst, it will kill some jobs.
Re:And when do we see any of that rewarded? (Score:5, Informative)
We hear a lot about productivity increase, productivity increase... why the hell should I celebrate that, I ask?
Wages have stagnated at the low end of the income distribution. People at the high end have done much better. So get an education instead of trying to compete with a servo motor.
The owners of capital have done even better. My 401K has gone up much faster than my paycheck. So, save, invest, and be one of the owners.
At worst, it will kill some jobs.
It will kill some jobs and create others, just like all tech innovations. My son recently got a job as a prompt engineer.
Re:And when do we see any of that rewarded? (Score:4, Insightful)
Indeed. My investments have been doing great but I believe this is a short to mid term win. Long term, having countless millions of unemployed and _unemployable_ people is terrible for society.
I'd gladly give up a few points of investment gain if it meant we had an overall healthier and happier society and not millions of people on the dole multi generationally.
There are many reasons for how we got here such as a sick entertainment/media culture that encourages and glamorizes shitty people of all sorts, schools no longer focused on the 3 Rs, giving multi national mega corporations human rights, and many other errors both intentional and not. I don't have a solution but I know we're not headed in the right direction as a society. This is not an us vs them thing. It is not a democrats vs republicans thing. It is also not a rich vs poor thing. We see this toxic new society spreading across all western nations. Each has their own take on it but they're all rotting at the core.
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I'm not worried about me, I'm worried about society. And yes, in a roundabout way also about myself.
I won't have a problem with money. Hell, I already make three times what I need. The problem isn't with people at my pay grade. The problem is that the amount of these people is very low, while more and more people earn less and less. And at some point, the critical mass will be reached.
I would really like to enjoy my retirement in peace instead of having to spend what I have on not getting looted by those th
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more and more people earn less and less.
That's not what's happening. Low-end wages have stagnated, but they haven't declined.
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Then you can certainly explain why in 1970, a single income from a blue collar job was enough to feed a family of four, but today two people working full time can barely make ends meet.
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Partially because they're renting rather than owning, partially because there are more shiny things to spend on, and partially because the measures of inflation aren't real. So, yes, their wages have, effectively, been severely cut.
The measures of inflation don't reflect the needs of the poor. but more closely tract the needs of the middle class, and probably the upper middle class. If they tracked the needs of the poor they'd be based around low cost housing rental, basic foods, etc. They wouldn't consi
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Partially because they're renting rather than owning
I'm really sure a lot of them would absolutely prefer owning to renting, but with a shot credit history due to student loans and requiring more money to actually buy any kind of house than the average person can even get a mortgage for because they can't even pay back a 60 year loan on their salary, their chances to ever own anything are zero.
partially because there are more shiny things to spend on
You'll notice that those "shiny things" you mention here are actually what's dirt cheap. And even something more and more people have to go without because groceries a
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Partially because they're renting rather than owning
Home ownership today is about the same as in 1970, at about 65%. People today are not more likely to be renters.
Homeownership in the United States [wikipedia.org]
The measures of inflation don't reflect the needs of the poor.
Actually, it's the other way around. Inflation reflects the prices of a mixture of goods and services. The price of goods has risen slower than the price of services. Poor people mostly buy things, so they haven't seen prices rise as fast as richer people who buy mostly services.
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Then you can certainly explain why in 1970, a single income from a blue collar job was enough to feed a family of four
Because that is a myth. Some people had jobs like that, but the majority did not.
In 1970, the median household income was $9870, which is $64,648 in 2023 dollars.
In 2022, the median household income last year was $74,580.
In 1970, the average household had five people, so that's $64,648/5 = $12,900 per person in 2023 dollars.
Today, the average household is three people, so that's $74,580/3 = $24,860 per person, or nearly double.
In 1970, female workforce participation was 43%. Today it is 56%.
Meanwhile, house
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Well I have a 401 k too. Too bad my company made a deal which includes a service fee which takes away most
So about half of /. now says get an education (Score:5, Insightful)
Thing is everybody's wrong. Go look up a Business insider article about how 70% of middle class jobs were lost to automation since the 1980s. Those weren't all factory jobs. Software put thousands and thousands of accountants and data entry people out of work. Not to mention a ton of it people. Hell just in the last few years more cloud computing has meant that businesses that used to need a full-time tech person just don't anymore..
I agree that we need more education. In the past you could get by with a grade school education and it wasn't long before that wasn't enough to increase worker productivity and we needed high school education and now we're at the point that nothing short of a college education really increases worker productivity in a meaningful way. And the only way to get a decent life out of this country right now is to be so productive and responsible for so much revenue that the bean counters are too busy making money off your work to try and cut your pay or replace you with somebody cheaper.
But that's not going to be sustainable even with declining birth rates. We're going through another industrial revolution and we're just kind of pretending it's not happening. China was literally building empty cities to try and keep their people occupied so that they didn't revolt. We're either going to have to start taking the largess from all this automation and spreading it around like we did with the wealth generated in the 50s and 60s (mind you this time spreading it around regardless of skin color) or we're going to have the same problem every country that ignores 70% of its population runs into, somebody's going to come along talk those 70% up into a storm give them rifles and they're going to come for those of us who still have decent jobs.
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You seemed pretty happy because you're a customer (Score:2)
Now if this particular guy was an owner operator and he was probably doing all right. But the actual rank and file plumbers generally don't make all that much money and it's a living in a major city they're making a little bit more than you would loading trucks at Target. So if yo
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China was literally building empty cities to try and keep their people occupied so that they didn't revolt.
that is nonsense. They were building towers and city blocks that nobody occupied, true, but that has absolutely *nothing* to do with occupying people for no reason, that is bs. That was due to all of the inflation in the form of US dollars and bonds, which was accumulating in the hands of Chinese who couldn't really buy anything for it from the USA (huge trade imbalance) and they were still looking for a return, this was the best they came up with - building with a belief that real estate always goes up
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The term "labor productivity" is a loaded term because it implies what you said, but that's not what it actually means. It's just the total output divided by the number of hours worked.
So let's say you take an auto production line. You replace half the workers with robots, and the remaining workers do exactly the same job at exactly the s
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Yes, a considerable amount of that productivity increase is due to better tools and better processes. How does this change anything? If you get more productivity out of fewer workers, why don't the workers deserve higher compensation?
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For example, let's a say a call center of 200 phone workers is replaced by ChatGPT and 2 sysadmins. "Worker productivity" just went up by a factor of 100!! So let's say, in the name of fairness, you keep payroll the same. Well now you have 2 sysadmins taking home the paychecks of 200 former phone workers, which is maybe 50 times as much as sysadmins doing the exact same wor
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Is it fair? No. Is it fairER than what we have now? Hell yes. Because what today happens in your example is that the CC agents get fired, the sysadmins get more workload and the money goes to the C-Level bonus.
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why don't the workers deserve higher compensation?
Because people aren't paid what they "deserve". They are paid what it would cost to replace them.
The workers didn't pay for the tools and technology that made the factory more profitable. They aren't working harder, the robots are.
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I know that they aren't. All I wanted to explain is why rejoicing over increased productivity is not exactly something I'm in the mood for, and I frankly don't see why the hell I should see it as something positive.
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I frankly don't see why the hell I should see it as something positive.
Do you invest? Have a 401K? An IRA?
If so, you directly benefit.
Do you plan to collect social security? If so, it will be unaffordable as the working population declines without productivity improvements.
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Things are a bit differently over here. I do indeed expect to see "social security" retirement money, mostly because of how it's done over here. We're not doing the "save up, then pay out" model, over here, it's more "whatever we have now from the working people goes to the retired people". The advantage is easy: Unless society breaks down, there WILL be money to distribute. Because there is no insurance company that could go bust.
But yes, I do invest in various companies. Most of them are actual direct inv
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it's more "whatever we have now from the working people goes to the retired people".
That isn't different. That's the same way it works everywhere.
Unless society breaks down, there WILL be money to distribute.
No, there won't. Working-age populations are declining in every first-world country, while the number of retirees is soaring. This trend will accelerate in the future. The people who will enter the workforce 20 years from now have already been born, so there is no guesswork here. Without big productivity improvements, the current level of pensions will not be affordable.
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Our only hope is that the boomers croak faster than expected.
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Tech isn't the answer. Because you might have noticed that we still have unemployment. Now, when you check what kind of people are unemployed, you'll notice a trend. The number of Nobel Prize laureates who are unemployed is surprisingly small, while the number of people whose biggest achievement in life was that they can say "you want fries with that?" without too many grammatical errors is pretty large.
Now take a wild guess which group is rather being replaced by technology.
Technology will not save us here
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Tech is not the answer to any problem we have right now. If anything, it is part of the problem.
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We badly need green energy tech, if anything like the standard of living enjoyed for the last 100 years is to continue.
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We hear a lot about productivity increase, productivity increase... why the hell should I celebrate that, I ask?
In the past 50 years, productivity per worker hours went up 200 to 1000 percent. Everyone produces at least twice, in some cases ten times more than half a century ago. Yet wages stagnate and are, in terms of purchasing power, lower than 50 years ago.
Why should anyone celebrate that? Why should I give a fuck about productivity if the best outcome I could hope for is none at all. At worst, it will kill some jobs.
You shouldn't if you're a wage slave. AI is the biggest threat to a wage slaver.
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Yet wages stagnate and are, in terms of purchasing power, lower than 50 years ago.
50 years ago, how many hours did you have to work to buy a handheld combination computer-and-communication device? How much did a 300-horsepower car with antilock brakes, amazing crash safety, driver assistance and climate control cost? How many health insurance plans provided vaccination against chicken pox, shingles, HPV or hepatitis? What data rate was defined as broadband access, and how many Americans had that at home? How many vegan products were in the average supermarket that were not just fresh
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How many hours for a loaf of bread? Or a gallon of milk? How many hours did you have to work to afford your rent?
I don't know about you, but I could live without electronic gadgets and gimmicks, but bread, milk and a roof above my head, that's something I need.
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Now do eggs or beef or gas. Or look at milk and bread prices over a longer time period: https://www.afcea.org/signal-m... [afcea.org] . Your argument is based on cherry-picking items and years.
Inflation-adjusted median income has gone up over the last 50 years. https://dqydj.com/household-in... [dqydj.com]
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We don't have AGI yet. LLMs don't understand what they're talking about. They're a part, probably a necessary part, of an AGI but they sure aren't the whole thing. I don't expect AGIs for a few years yet.
I'm still guessing 2035 as the year an AGI actually shows up, but now instead of feeling that too soon, people seem to be feeling that's too late. I note that that is around a decade from now, so I suspect that there will be "engineering problems" that hold things up. And I think the break-through wil
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...when Fed chairman soberly confined themselves to Fed policies
No, I don't remember that. The Fed has always issued research reports and dabbled where perhaps it shouldn't.
The LTCM bailout happened 25 years ago this week, orchestrated by the NY Fed.
Tools increase productivity for the owner (Score:2)
An increase in productivity could mean a decrease in wages, because wages are not based on the value generated, but rather the cost to replace the worker. Ever since 1973 productivity has increased while wages have not.
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An increase in productivity could mean a decrease in wages, because wages are not based on the value generated, but rather the cost to replace the worker. Ever since 1973 productivity has increased while wages have not.
When anyone says AI, why do people nervously glance at their paychecks?
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When people say "labor" and "productivity" it makes sense to check if your paycheck matches.
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Yeah, Mr Paychex.
Everything is your paychex, only paychex matters, fight for your paychex.
When the word labor and productivity comes up and you think paycheck, then you're wage-slaving.
Wage-slaving is the lowest form of human existence for people who are supposedly free and there is an army of brainwashers telling you to keep wage-slaving.
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I don't understand why you're so obsessed with trying to convince people to accept lower paychecks.
translation (Score:1)
it will put tons of people out of a job, so the billionaires can steal more of the money
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it will put tons of people out of a job, so the billionaires can steal more of the money
Oh no won't anyone think of the jobs?
Re: translation (Score:2)
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They said people. That's what matters. And without a job in the US you likely can't pay for healthcare, rent, or food
Oh wow, he really was thinking of the people when he was thinking about the jobs.
People are just walking-talking jobs, right?
And without a job, people don't deserve healthcare, rent or food.
Only a job can provide you healthcare, rent and food. Only by giving everything you have to your job can you get the nod of approval from your fellow humans and a right to exist in society.
meanwhile in Russia... (Score:2, Interesting)
https://tass.com/society/16786... [tass.com]
21 Sep, 20:39 /TASS/. Record low unemployment in Russia is an indicator of the effectiveness of economic policy, President Vladimir Putin said at a meeting of the Presidium of the Stat
Putin calls low unemployment in Russia 'indicator of effective economic policy'
According to the Russian president, it is now important that the reduction in unemployment is systemic, structural in nature, and is the result of consistent efforts in a number of areas
VELIKY NOVGOROD, September 21.
Re:meanwhile in Russia... (Score:4, Informative)
Russia has low unemployment because they have hundreds of thousands of dead and injured in Ukraine. Low unemployment is not a surprise.
I'll bet their weapons, medical and burial industries are booming.
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Ukraine could have zero or infinite casualties. What does that have to do with the able bodied working population available in Russia as part of their unemployment statistics?
It is a mathematical fact that Russia has had 6 figures worth of dead and injured in the war.
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I guess that would mean that Ukraine has even better unemployment numbers.
But frankly, that's beyond the point. Russia is screwed. Ukraine will get rebuilt by the west after the war, but Russia? If anything, the vultures that it now calls allies will break it up and feast on the corpse.
Re:meanwhile in Russia... (Score:4, Funny)
Putin calls low unemployment in Russia 'indicator of effective economic policy'
We here in central Europe have tried that "effective economic policy" too. Later that full employment project became known under a different name, "second world war". It was pretty effective at eliminating unemployment... well, for a while. Kinda backfired when the allies bombed our industry to ruins. But 'til then it sure was a really good way to fight unemployment. A lot of people had a pretty simple and very secure job. A real lot of them held down that job for the rest of their life.
How (Score:3)
Here is how AI improves productivity. Instead of a human idiot CSR who gets paid $20/hr ($1/hr in India) to fail to answer your question in 30 minutes of trying, a new spiffy AI that costs only $.03/hr will fail to answer your question in only 45 minutes of trying.
Euphemism (Score:2)
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Work changes over time. Around 1810, the Ludittes destroyed the machines which replaced skilled workers. It did cause hardship but that was a short term problem because the machines needed people to construct them, operate them, repair them, and also created ancillary jobs because they produced textiles much faster. They also reduced the cost of textiles by a large amount. All in all, substantially greater productivity without creating long-term unemployment.
Jobs are always being replaced. My grandfath
Cook, the first Black woman to serve on the Fed's (Score:2)
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That threw me off as well. All of a sudden comes that information, what should I do with it? Does she have some special insights related to AI and/or productivity as a Black woman? Is she really a woman? Is she really black? Does it matter? Should I expect that she was given the job because of diversity/equity/affirmative action and so is less qualified than someone else would have been? Is the information irrelevant? If so, why was it given?
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Wikipedia lists her as "An authority on international economics, especially the Russian economy, she has been involved in advising policymakers from the Obama Administration to the Nigerian and Rwandan governments."
Not sure what to make of it in this context.
OK found her address: https://www.federalreserve.gov... [federalreserve.gov]
"The potential for far-reaching changes to the economy from generative AI is clear." Is it?
"Among firms, success deploying AI will depend on strategic decisions, such as investing in training, reorg