As digital devices like computers and robots get more powerful and capable over time thanks to "Moore’s law," they can do more of the work that people used to do. Digital labor, in short, substitutes for human labor. This happens first with more routine tasks (both physical and cognitive), which is a big part of the reason why less educated workers have seen their wages fall the most in recent decades as we moved ever deeper into the computer age.
As we move ahead, the Great Decoupling will only accelerate, for two reasons. First, Moore’s law will continue to operate, and computers will keep getting drastically cheaper over time. Digital labor will become cheaper than human labor not only in the United States and other rich countries, but also in places like China and India. Offshoring, in short, is only a way station on the road to automation.
Second, technologies are going to continue to become more powerful and capable, and to acquire more advanced skills and abilities. They can already drive cars in traffic, understand and produce natural human speech, write clean prose, and beat the best human Jeopardy! players. Just a few years ago, most experts would have labeled these “non-routine tasks” – the kind that computers were supposed to be no good at.
Digital progress has surprised a lot of people recently, and we ain’t seen nothing yet. Brawny computers, brainy programmers, and big data are a potent combination, and they’re nowhere near finished. The labor-force implications of their work are nicely summarized by venture capitalist Marc Andreessen, who says that, “The spread of computers and the Internet will put jobs in two categories: People who tell computers what to do, and people who are told by computers what to do.” Only one of these two job categories will be well paid.