NBER paper: technical change 'commoditizes' labor, boosting productivity but suppressing wages
PeterHndrsn · x · 2026-10-03
An NBER working paper, 'The Commoditization of Labor' (Fukui, Nakamura & Steinsson, WP 35815), argues that technical change often simplifies jobs by standardizing tasks—raising productivity but making workers more substitutable and 'commoditized.'
Key points:
- Commoditization erodes worker bargaining power: when anyone can do the job, workers are disposable, improving firms' outside options and lowering wages
- The authors build a model capturing both the productivity-enhancing and wage-depressing effects
- The model helps explain the productivity-wage divergence in services, rising wage markdowns despite falling local concentration, and the decline of the large-firm wage premium
A commenter adds that overall job counts may stay stable while wages get suppressed, calling for policy to prevent that outcome.
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