labor-economics 6

I charted the OpenAI GDPVal paper with industry compensation as the size and AI augmentation as color. Big green areas are we’re paying people where AI does better. Click here to see the interactive visualization. Clicking to see some actual tasks compared. I use this to check whom to ask advice: AI or professional. AI beats Personal Financial Advisors ~64% of the time. So I invested half my money using ChatGPT’s recommendation. (UTI Nifty 50, if you’re curious.) ...

Jobs fall with technological efficiency. Farmers in the US fell from 40% (1900) to ~2.7% (1980) and ~74% drop from 1948 to 2019 despite ~175% output growth; wheat harvest efficiency rose ~75* (300>3-4 man-hours). Mechanics & repairers grew from ~140 k (1910) to ~4.64 M (2000); machinery reliability lagged so technician demand surged over decades. Construction workers doubled from 1.66 M (1910) to 3.84 M (2000) even as labor share fell (4.3>3.0%); 5-10* productivity gains met booming development. Switchboard operators plunged from ~1.34 M (1950) to ~40 k (1984) and ~4 k today as rotary-dial and digital switching automated call handling. Travel agents dropped >50% from ~100 k (2000) to ~45 k (2022) while travel demand rose; online booking doubled trips per agent. Elevator operators went from building-staff staple to near zero by the 1940s once automatic doors and button controls arrived. Lamplighters vanished from thousands to near zero post-1907 electrification; Edison’s incandescent lamps eliminated manual lighting. Jobs also grow with technology efficiency. ...

How much does an LLM charge per hour for its services? If we multiple the Cost Per Output Token with Tokens Per Second, we can get the cost for what an LLM produces in Dollars Per Hour. (We’re ignoring the input cost, but it’s not the main driver of time.) Over time, different models have been released at different billing rates. New powerful models like O3 cost ~$7/hr – Poland’s minimum wage rate. Gemini 2.5 Pro costs ~$12/hr – France’s minimum wage rate. The latest Claude 4 Sonnet costs ~$2/hr – India’s minimum wage rate. ...

Why your boss is overpaid. The ugly truth is that your boss is probably overpaid–and it’s for your benefit, not his. We work our socks off in underpaying jobs in the hope that one day we’ll win the rat race and become overpaid fat cats ourselves. Economists call this “tournament theory.” The second, and more counterintuitive, prediction of tournament theory is that the more luck is involved in work, the larger the pay gaps should be between the winners and the losers. If Jack’s promotion is 90% luck and 10% effort, Jack may be inclined to goof off–unless, of course, the rewards for promotion are absolutely astronomical. And they sometimes are. ...

Beautiful people are paid more because of a positive feedback mechanism. Employers expect them to perform better. They expect themselves to perform better. And these come across. Comments Madhu 10 Apr 2006 7:12 am: he he.. my research deals with whether board of directors have any impact on CG et al. I should probably consider the looks of the board as an important parameter S Anand 12 Apr 2006 7:10 pm: It’s supposed to be a stronger effect with women. You could factor that in :-) Madhu 14 Apr 2006 7:28 am: and probably suggestion reservation for women in the board;)

The US Bureau of Labor Statistics has published a list of the fastest growing occupations from 1998-2008. The Indian Labour Bureau publishes some useful statistics too.