Wage Theft Costs American Workers as Much as $50 Billion a Year

AI Exec: We May Have Pulled Off “The Largest Theft of Labor in Human History”

Documents from our lawsuit reveal how tech leaders talk when they think no one is listening.

Are new technologies fuelling wage inequality? Evidence from Spain

New research shows the net effect of technological change (incl. artificial intelligence) on wages in Spain has been to fuel rising wage inequalities

Microsoft Director Privately Admitted AI Was the “Largest Theft of Labor in Human History,” Unsealed Court Documents Show

Newly unredacted court documents reveal damning statements by two AI executives in a landmark case about intellectual property.

Microsoft exec called AI scraping ‘the largest theft of labor in human history,' new unredacted filings reveal | TechCrunch

Newly unsealed court filings show Microsoft privately called OpenAI's data practices "theft" while both companies scraped paywalled Times content, built datasets from it, and warned internally it would gut publishers.

Employment protection legislation reforms and the rising cost of job loss

A widely cited argument in favour of easing employment protection rules is that greater flexibility in hiring and firing can lead to increased job matching efficiency and productivity, but this may come at a cost for certain groups of workers. This column examines the impact of the 2012 ‘Fornero Reform’ in Italy, which lowered the legal and financial risks associated with dismissals for employers in order to encourage firms to offer more open-ended contracts and thus help bridge the divide between permanent and temporary employment. In practice, the reform increased the cost of job loss, particularly for younger and more vulnerable workers.

Handbook of Labor Economics

What new tools and models are enriching labor economics?Developments in Research Methods and their Application, Volume 4A summarizes recent advances in the ways economists study wages, employment, and labor markets. Mixing conceptual models and empirical work, contributors cover subjects as diverse as field and laboratory experiments, program evaluation, and behavioral models. The combinations of these improved empirical findings with new models reveal how labor economists are developing new and innovative ways to measure key parameters and test important hypotheses. - Investigates recent advances in methods and models used in labor economics - Demonstrates what these new tools and techniques can accomplish - Documents how conceptual models and empirical work explain important practical issues

Arizona Exploiting Prisoner Labor for Profit | Prison Legal News

A new constitutional amendment proposed to Congress in June 2023 would remove the exception for prisoners to the U.S. ban on slavery. The effort follows a report from Arizona in December 2022, which found that private firms in the state used over two dozen undocumented migrant workers they could never legally hire but for the fact they were incarcerated by the state Department of Correction, Rehabilitation and Reentry (DCRR).

The Hidden Tax on Blue-Collar Workers and Building in America

The unemployment insurance system has a design flaw that penalizes the construction industry, leading to fewer workers and lower productivity. Over time, that means less – and more expensive – housing.

Do Employers Have More Monopsony Power in Slack Labor Markets?

This article confronts monopsony theory’s predictions regarding workers’ wages with observed wage patterns over the business cycle. Using German administrative data for the years 1985 to 2010 and an estimation framework based on duration models, the authors construct a time series of the labor supply elasticity to the firm and estimate its relationship to the unemployment rate. They find that firms possess more monopsony power during economic downturns. Half of this cyclicality stems from workers’ job separations being less wage driven when unemployment rises, and the other half mirrors that firms find it relatively easier to poach workers. Results show that the cyclicality is more pronounced in tight labor markets with low unemployment, and that the findings are robust to controlling for time-invariant unobserved worker or plant heterogeneity. The authors further document that cyclical changes in workers’ entry wages are of similar magnitude as those predicted under pure monopsonistic wage setting.

Unauthorized Immigration Effects on Local Labor Markets

The large increase and subsequent decline of unauthorized immigrant workers in recent years have raised questions about the impact of these changes on local labor markets across the United States. New analysis linking immigration data with employment data for specific areas suggests that the rapid rise in unauthorized immigrant worker flows increased local employment roughly one-for-one. Extending the analysis to the industry level further suggests that the slowdown of net immigration had a large negative impact on local employment, particularly for construction and manufacturing.

AI Adoption and Inequality

There are competing narratives about artificial intelligence’s impact on inequality. Some argue AI will exacerbate economic disparities, while others suggest it could reduce inequality by primarily disrupting high-income jobs. Using household microdata and a calibrated task-based model, we show these narratives reflect different channels through which AI affects the economy. Unlike previous waves of automation that increased both wage and wealth inequality, AI could reduce wage inequality through the displacement of high-income workers. However, two factors may counter this effect: these workers’ tasks appear highly complementary with AI, potentially increasing their productivity, and they are better positioned to benefit from higher capital returns. When firms can choose how much AI to adopt, the wealth inequality effect is particularly pronounced, as the potential cost savings from automating high-wage tasks drive significantly higher adoption rates. Models that ignore this adoption decision risk understating the trade-off policymakers face between inequality and efficiency.

Cashing Out Retirement Savings at Job Separation

We investigate the impact of employer matching contributions on leakage at job termination. , The U.S. government imposes a 10% penalty to discourage preretirement leakage—cash withdrawal from 401(k) retirement savings before the age of 59.5 years. In our data set with 162,360 terminating employees covered by 28 retirement plans, 41.4% of employees leaked by cashing out 401(k) savings at job separation, most draining their entire accounts. We investigate the impact of employer matching contributions on leakage at job termination. The “composition” of funds in one’s 401(k) balance matters: leakage increases with employer contribution proportion. Micropatterns in our data align more with behavioral than with economic explanations of this effect. We estimate that a 50% increase in employer/employee match rate increases leakage probability by 6.3% at job termination. However, there could be a 35.3% reduction in leakage probability if employees ignore the perceived incentive generated by the account composition effect. Approximately 60% of accumulated assets from a 50% increase in match rate leak out of the system due to the account composition effect attributable to the percentage of assets contributed by the employer. Employers with more generous matches care about their employees’ well-being in retirement, but unintentionally nudge employees to cash out when they change jobs. We highlight proposals to help employers curb avoidable leakage. History: K. Sudhir served as the senior editor and Tat Chan served as associate editor for this article. Funding: This work was supported by the Social Sciences and Humanities Research Council of Canada [Grant 435-2018-0509]. Supplemental Material: The data files and online appendices are available at https://doi.org/10.1287/mksc.2022.1404 .

Wage Compression Drives Nordic Income Equality

Income inequality in the Nordic countries — Denmark, Finland, Norway, and Sweden — is substantially lower than in the United States or the United Kingdom despite similar levels of per capita income. The Gini coefficient for disposable income in Nordic countries averages 0.27, compared to 0.39 in the US and 0.36 in the UK. In Income Equality in the Nordic Countries: Myths, Facts, and Lessons (NBER Working Paper 33444), Magne Mogstad, Kjell G. Salvanes, and Gaute Torsvik analyze the underlying source of these disparities. They employ detailed microeconomic data and statistical decomposition techniques and consider distributional statistics on income, wages, working hours, education, and skills across these countries.

"Make Americans pay again!" (L'Opinion) - Emmanuel Combe

Emmanuel Combe a publié le 27 Décembre 2024 une chronique dans L’Opinion sur la politique économique à venir de Donald Trump. Make Americans pay again ! Plusieurs études académiques ont montré que le protectionnisme prati<qué par Donald Trump avait détruit de l’emploi au niveau agrégé Donald Trump a été élu, comme lors de son premier mandat, […]

Technological Disruption in the US Labor Market • The Aspen Institute Economic Strategy Group

DAVID DEMING, CHRISTOPHER ONG, LAWRENCE H. SUMMERS This paper explores past episodes of technological disruption in the US labor market, with the goal of learning lessons about the likely future impact of artificial intelligence (AI). The authors measure changes in the structure of the US labor market going back over a century in two ways.&nbsp...