MIT Study Reveals Firms Use Automation to Control Wages Rather Than Boost Productivity

A provocative new study from MIT economists suggests that U.S. firms are frequently deploying automation not to enhance output, but to curb labor costs. By targeting employees who earn a ‘wage premium’—pay above the standard market rate—companies use technology to diminish worker leverage and keep salaries in check.

This strategic use of automation is a significant driver of economic inequality. Interestingly, the researchers found that while these moves effectively lower wage expenses, they do not necessarily result in meaningful gains in overall productivity. The study challenges the tech-optimist view that automation always leads to a more efficient and prosperous economy for all.