So many companies cut their workforce as much as 10-15% citing that those jobs can be fully automated by the use of AI but I am still waiting to see any meaningful price cuts of their products from the said companies, etc.

Otherwise this will mean that they are doing this just to increase their profit margins and please their shareholders and don’t care about their customers or workforce.

  • Lvxferre [he/him]@mander.xyz
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    1 year ago

    If you were to follow Adam Smith to the letter, it will Eventually® get cheaper: lower production cost leads to increased supply, and unemployment leads to decreased demand. Both forcing the prices down.

    In practice, though, there are at least two problems with this reasoning:

    • The hand of the market has Parkinson’s. Sure, it might “eventually” put things in place, but before that the hand will keep shaking things up and down, while people still need to live.
    • Smithsonian supply and demand assumes an infinitely competitive free market. There’s none - and specially not in this current situation, where you got oligopolies everywhere, and plenty services+goods have huge natural costs of entry.

    In those situations I’d simply ditch Smith and look at Marx instead.

  • weeeeum@lemmy.world
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    1 year ago

    Nope. Worker productivity has increased many fold over the last 50 years, meaning each person can produce many times more goods.

    Wages have been stagnant and cost of living is through the roof, despite all of this increased efficiency, productivity, fewer workers and much cheaper operating costs.

    We’re fucked lol

    • alehc@slrpnk.net
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      1 year ago

      Genuine question. Why hasn’t free market forced the prices to drop? If company X makes Y twice as cheaply, it could drop its prices like 20% and having way more customers and way higher profits. Why hasn’t this ever happened?

      • raldone01@lemmy.world
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        8 months ago

        To some degree barrier of entry. Let’s say I want to create a smartphone. I know it’s possible to do it cheaper, without selling customer data or with special features.

        You would need crazy amounts of start captial to even enter the market and the current leaders would make your entry as miserable as they could with huge sales and temporary minor pro consumer moves.

        If you could get the captial you would probably fail there or cave and accept some kind of deal where you become rich and your company gets ingested and dissolved by current market leaders.

  • Cowbee [he/they]@lemmy.ml
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    1 year ago

    Once the labor force is truly laid off en masses as AI gets better, then competition will force prices lower, dramatically reducing margin for profits. It’s the Tendency for the Rate of Profit to Fall, you just have to wait a few years for the full effects.

    10-15% cuts are nothing compared to what may come.