An MIT-Yale study published in the Quarterly Journal of Economics finds that U.S. firms since 1980 have frequently used automation not to maximize productivity, but to eliminate workers earning a 'wage premium' — those paid above-market rates relative to their qualifications. The research estimates automation accounts for 52% of U.S. income inequality growth from 1980–2016, with about 10 percentage points tied specifically to this wage-targeting behavior. This inefficient targeting has offset 60–90% of potential productivity gains from automation, helping explain the so-called productivity paradox despite rapid technological advancement. The study, co-authored by Nobel laureate Daron Acemoglu, argues that greater profitability and greater productivity are not the same thing, and that more carefully calibrated automation could yield better long-term economic outcomes.
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