income inequality

A new working paper co-authored by Prof. Nathan Wilmers finds that affordable chain restaurants can provide “much more socioeconomic integration than do independently owned commercial businesses — or, for that matter, traditional public institutions,” reports Catherine Rampell for The Washington Post. “The authors analyzed a massive trove of geolocation data to assess where and when Americans come into contact with people of different income classes than themselves,” writes Rampbell, “if they do at all.”

Prof. David Autor speaks with Delphine Strauss of the Financial Times about the risks AI poses to jobs and job quality, but also the technology’s potential to help rebuild middle-class jobs. “The good case for AI is where it enables people with foundational expertise or judgment to do more expert work with less expertise,” says Autor. He adds, “My hope is that we can use AI to reinstate the value of skills held by people without as high a degree of formal education.”

On May 20^th, MIT students and community leaders gathered for “Hacking the Archive,” a hackathon aimed at addressing the wealth gap between Black and white residents of Boston, with a particular focus on housing as a generator of wealth, reports Kenneth Cooper for The Bay State Banner. “As far as I’m concerned, there’s no bigger challenge than the racial wealth gap,” explained Prof. Karilyn Crockett.

Guardian reporter Will Hutton spotlights “Power and Progress,” a new book by Institute Prof. Daron Acemoglu and Prof. Simon Johnson that makes the case that “the political struggle has consistently aimed to contain excessive inequality of wealth, and act collectively to share prosperity. It is successive waves of transformative technologies above all that bring the productivity gains that create great wealth, only for it to be captured by the incumbent elite.”

Wired reporter Caitlin Harrington writes that a study by researchers from MIT and Stanford highlights the impact of generative AI tools on workers and raises a “provocative new question: Should the top workers whose chats trained the bot be compensated?”

Researchers from MIT have found that “although women received higher performance ratings than their male colleagues, they received 8.3% lower ratings for potential than men,” reports Caroline Castrillon for Forbes. “Because those ratings strongly predict promotions, female employees were 14% less likely to be promoted than male ones,” writes Castrillon.

Researchers from MIT and elsewhere have tested the impact of generative AI among 5,000 customer service agents within a Fortune 500 software company, reports Jo Constantz for Bloomberg. “The company’s lowest-skilled workers became 35% faster with the tool,” explains Constantz. “The researchers think this was because the AI essentially transferred top performers’ knowledge to less-experienced colleagues through the automatically-generated recommended responses.”

Prof. Danielle Li, graduate student Lindsey Raymond and Stanford University Prof. Erik Brynjolfsson released an “empirical study of the real-world economic effects of new AI systems,” reports Greg Rosalsky for NPR. The researchers found “AI caused a group of workers to become much more productive.” Rosalsky adds that the study also “shines a spotlight on just how powerful AI is, how disruptive it might be, and suggests that this new, astonishing technology could have economic effects that change the shape of income inequality going forward.”

A study by Prof. David Autor and his colleagues have found that the pandemic narrowed the wage gap between America’s highest and lowest paid workers, reports Geoff Colvin for Fortune. The study also found “wages of the least educated workers increased more than the wage of the most educated workers, reducing the college wage premium,” writes Colvin.

New research by Prof. David Autor explores how the wage gap narrowed during the Covid-19 pandemic, reports Justin Lahart for The Wall Street Journal. Lahart writes that the findings suggest that “even as the pandemic fades, competition for low-wage workers will be more intense than before the pandemic. That could lead to further reductions in income inequality, raise labor costs at firms that employ low-wage workers, and reshape the U.S. business landscape.”

The Economist highlights several studies by MIT researchers on income inequality and wages in the U.S., noting that “Clem Aeppli of Harvard and Nathan Wilmers of MIT found that earnings inequality basically reached a plateau after 2012.” Additionally, Prof. David Autor and his colleagues have found that wages for the bottom half of workers have been growing roughly two percentage points faster than for the upper half of workers.

Prof. Nathan Wilmers and his colleague have used multiple measures of earnings to trace income inequality in the U.S., reports Tim Fernholz for Quartz. “After decades of increase since the 1980s, they found that income inequality peaked in 2012 and has held steady or perhaps even fallen since,” explains Fernholz. 

Motherboard reporter Lauren Kaori Gurley spotlights Unit, a new digital platform developed by MIT graduate James Earl White that is aimed at easing the unionization process. Gurley writes that White “founded Unit after volunteering with several labor organizing campaigns in college, and studying how unions can reduce income inequality.”

New York Times reporter Ben Casselman spotlights a study by Prof. Daron Acemoglu that finds many technological advances have replaced human labor without increasing productivity. “If we automated less, we would not actually have generated that much less output but we would have had a very different trajectory for inequality,” says Acemoglu.

Prof. David Autor speaks with New York Times columnist Thomas Edsall about education and income inequality. “If the citizens of a democracy think that ‘progress’ simply means more inequality and stratification, and rising economic insecurity stemming from technology and globalization, they’re eventually going to ‘cancel’ that plan and demand something else,” says Autor.