• Since the 1980s, automation has replaced middle-income workers with robots and software.

• Automation has also made educated labor more valuable and contributed to income inequality.

• Artificial intelligence could cheapen educated labor and reduce inequality.

Automation widened income inequality in the US. The latest developments in AI might just reverse it.

In research released in March, OpenAI, the company that created ChatGPT, found that the newest artificial intelligence could affect white-collar workers more than the rest of the workforce. The technology could dampen the explosive wage growth they've experienced at the expense of their blue-collar counterparts by shifting more tasks to middle-skill workers, which could reduce income inequality. But that rosy future depends on how AI develops and whether we choose to regulate it.

Up to this point, automation has mostly hurt blue-collar workers. Daron Acemoglu, an economist at MIT, found that automation had driven 50% to 70% of the increase in US wage inequality since the 1980s. Machines, robots, and computer software replaced workers without a bachelor's degree in routine tasks, like assembly-line work or administrative office work. Less in demand, these workers saw their real wages fall or stagnate, especially for those previously making middle-class incomes.

This automation has placed a premium on skilled white-collar labor and increased wage inequality. While automation devalued and replaced lower-skill work, the earnings premium between workers with a bachelor's degree — a proxy for high skill — and those with a high-school diploma doubled, David Autor, an economist at MIT, found.

"Not only doesn't it not replace you, it makes your expertise more valuable," Autor told Insider.

Replacing lower-skill human labor with machines raises the demand and wages for abstract tasks that can't be easily automated. As a result, wage inequality has increased considerably over the past half century.