The labor market is a single interconnected system. As AI eliminates white-collar roles, displaced professionals will flood the blue-collar and gig economies, increasing labor supply and creating downward wage pressure across all sectors.

Despite centuries of automation, labor's share of economic output has surprisingly remained over 60%. A key reason is that even for automated products, human labor is a critical input somewhere down the supply chain, preventing the "network adjusted factor share" of capital from ever reaching 100%.

The perception of a 'desirable career' is shifting from a mandatory four-year degree to one that simply provides a family-sustaining wage and personal enjoyment. As skilled trades now often pay better than entry-level knowledge jobs, the long-held stigma against them is eroding.

Despite a 52-year explosion in technology and worker productivity, the average American worker's real weekly wages, adjusted for inflation, are lower today than in 1973. This highlights a fundamental failure of the economic system to distribute gains from innovation to labor.

As an economy shifts from manufacturing to trading financial paper, wealth concentrates at the top. Those who own assets see their net worth multiply, while real wages for the majority stagnate or decline as jobs are globalized and labor is arbitraged for the lowest cost.

Automation alone is insufficient for shared prosperity. Acemoglu argues that while automation is good for eliminating undesirable tasks, true economic progress requires a parallel focus on creating new, more complex tasks where human labor can be redeployed and find new opportunities.

In the new era of reindustrialization, skilled trades are becoming more lucrative and prestigious than many white-collar tech jobs. While coding school graduates struggle to find work, master electricians on data center projects are earning hundreds of thousands of dollars, signaling a major shift in the labor market's valuation of skills.

A new elite class has emerged in the top 10% of Americans who are wealthy from both high-paying jobs and capital investments. This fusion of labor and capital income is a modern phenomenon, creating a self-perpetuating and meritocratically justified upper class.

Acemoglu pinpoints the source of liberalism's current crisis: the rise of a powerful and numerous educated elite in the post-industrial economy. This group's ascendancy created a societal hierarchy that is fundamentally at odds with the liberal ideals of broad freedom and flourishing.