Answer to Question #125685 in Microeconomics for Oumou Diallo

Question

the production function is assumed to be fixed although the inputs are allowed to vary. In reality, technology advances constantly, which puts our economy in a dynamic equilibrium. One (noticeable) change in the past decade is the increasing adoption of automation by many industries. Here are a couple of interesting articles on automation and its impact on the labor market.

https://www.cnbc.com/2019/01/25/these-workers-face-the-highest-risk-of-losing-their-jobs-to-automation.html (Links to an external site.)

https://www.stlouisfed.org/publications/regional-economist/second-quarter-2019/rise-automation-robots (Links to an external site.)

Do you experience or observe this trend in the job market? Does it (and how) affect your career choice?

Answer 1

Yes, we observe this trend in the labor market. The demand for labor decreases, so the equilibrium salaries decrease too over time in industries where the use of automation increases.