Chicago, IL – Economist Alex Imas, a Professor of Behavioral Science, Economics, and Applied AI at the University of Chicago Booth School of Business, recently challenged the prevailing notion that artificial intelligence will drive human labor share to zero. In a tweet, Imas urged those predicting such an outcome to consider research highlighting the enduring economic value of human-centric services.
"People writing 'human labor share will go to zero' posts should really read this book...," Imas stated in his social media post, referencing a critical perspective on the future of work.
Imas's argument, elaborated in his Substack newsletter "Ghosts of Electricity," centers on the idea of sectoral reallocation in advanced economies. As AI makes the production of commodity goods and services increasingly cheap, consumer spending and employment naturally shift towards sectors where human involvement, experience, and social meaning remain paramount. This phenomenon suggests that while labor share might fall in some areas, the relational sector is poised to absorb a substantial portion of the economy.
He specifically points to research by Joachim Hubmer, particularly "The Race Between Preferences and Technology," which uses household data to demonstrate that higher-income households disproportionately spend on labor-intensive goods and services. This indicates non-homothetic preferences, where economic growth fuels demand for sectors that are difficult to automate, creating jobs even as technological forces push in the opposite direction. These "stagnant" sectors, by their very nature, become crucial for employment precisely because they resist automation.
Imas's work focuses on the intersection of AI, labor markets, and behavioral economics, exploring how technology reshapes productivity and creative work. His perspective offers a counter-narrative to alarmist predictions about widespread job displacement, suggesting that human skills will continue to find value in an AI-driven economy, particularly in areas requiring interpersonal interaction and unique human attributes. The debate over AI's long-term impact on employment continues to be a central topic for economists and policymakers alike.
