We analyze how output and wages behave under different scenarios for technological progress that may culminate in Artificial General Intelligence (AGI), defined as the ability of AI systems to perform all tasks that humans can perform. We assume that human work can be decomposed into atomistic tasks that differ in their complexity. Advances in technology make ever more complex tasks amenable to automation. The effects on wages depend on a race between automation and capital accumulation. If the distribution of task complexity exhibits a sufficiently thick infinite tail, then there is always enough work for humans, and wages may rise forever. By contrast, if the complexity of tasks that humans can perform is bounded and full automation is reached, then wages collapse. But declines may occur even before if large-scale automation outpaces capital accumulation and makes labor too abundant. Automating productivity growth may lead to broad-based gains in the returns to all factors. By contrast, bottlenecks to growth from irreproducible scarce factors may exacerbate the decline in wages.

Anxiety about automation is prevalent in this era of rapid technological advances, especially in artificial intelligence (AI), machine learning (ML), and robotics. Accordingly, how human labor competes, or cooperates, with machines in performing a range of tasks (what we term "the race between human labor and machines") has attracted a great deal of attention among the public, policymakers, and researchers.14,15,18 While there have been persistent concerns about new technology and automation replacing human tasks at least since the Industrial Revolution,8 recent technological advances in executing sophisticated and complex tasks--enabled by a combinatorial innovation of new techniques and algorithms, advances in computational power, and exponential increases in data--differentiate the 21st century from previous ones.14 For instance, recent advances in autonomous self-driving cars demonstrate the way a wide range of human tasks that have been considered least susceptible to automation may no longer be safe from automation and computerization. Another case in point is human competition against machines, such as IBM's Watson on the TV game show "Jeopardy!" Both cases imply that some tasks, such as pattern recognition and information processing, are being rapidly computerized. Furthermore, recent studies suggest that robotics also plays a role in automating manual tasks and decreasing employment of low-wage workers.3,22