Germany I Labor ‘Widening the Rich-Poor Gap’, Korea’s Advanced Fund 50 Trillion ‘Attracts the Common People’
While the paper on ‘Widening the Rich-Poor Gap’ in AI Labor Research in Germany won the grand prize, the Korean Democratic Party announced on the 6th a policy of ‘redistributing capital from the bottom up’ to attract investment from the common people in the ‘Advanced Fund 50 Trillion’.
In Germany, the three mainstream parties, including the Christian Democratic Union and the Social Democratic Party, jointly submitted a ‘bill’ for a special infrastructure investment fund of 500 billion euros to the House of Representatives and went through the legislative process based on expert diagnosis that artificial intelligence will bring about changes in the employment market by reducing the number of simple workers and increasing the demand for highly skilled labor, while the Democratic Party attempted to boost stock prices by promoting AI ‘economic profit boom’ and attracting citizens to invest in the ‘50 Trillion Fund’.
On the 3rd, the European independent media <Eurasitiv> reported that “the three parties, including the Christian Democratic Union and the Social Democratic Party of Germany, submitted a bill for a 500 billion euro ‘infrastructure investment fund’ to the House of Representatives.”
'Eurasitiv' reported that <the bill approved by the Christian Democratic Union (CDU), the Bavarian Sister Party (CSU) and the Social Democratic Party (SPD) includes a constitutional amendment to establish a special infrastructure investment fund worth 500 billion euros over ten years>, <and also includes exemptions from the federal "debt brake" for defense spending exceeding 1% of annual GDP and relaxed debt regulations for 16 federal states in the US>. The German Institute for Labor Economics (IZA) reported on the 17th of last month in a paper review on how artificial intelligence (AI) is reorganizing the labor market that "the increased demand for high-level routine work" is causing "labor to move to industries less exposed to AI."
The IZA found that "while robots mainly reduce routine work, AI has a distinct impact by reducing non-routine abstract work such as information gathering while increasing the demand for 'high-level' routine work such as process monitoring." "This job movement mainly occurs within specific occupations and becomes more pronounced over time. The effect of forced migration is relatively small, but workers respond by changing jobs, often moving to industries less exposed to AI."
The IZA continued that "the study highlights the difference in wage effects." "While low-skilled workers tend to experience wage losses due to changes caused by AI, high-skilled workers generally experience wage increases." "The rich get richer and the poor get poorer" in worker wages in the AI economy. Confirmed.
The winning paper is titled <AI, Job Change and Worker Reallocation> (IZA DP No. 17554) and the winners are Christina McElherran (University of Toronto), Andrew Oswald (IZA and University of Warwick). Erwin Winkler (University of Erlangen-Nürnberg and IZA) and the prize money is 5,000 euros.
The selection committee of the Labor Economics Institute stated that the award paper "represents the best of modern labor economics."
Regarding the results of the 'Peer Review Process in Economics' that analyzed the limitations of AI search functions, the Labor Economics Institute stated on the 7th of last month that <AI evaluations show systematic bias by favoring submissions from authoritative institutions, prominent economists, and male authors even when the research content is the same> and <AI has difficulty distinguishing between truly top-notch research and high-quality AI-generated papers, raising concerns about the ability to evaluate novelty and originality>.
The Labor Economics Institute appointed Pat as a new IZA discussion paper participant. To rigorously evaluate the role of AI, Pattaranuttaporn (MIT AI researcher), Natavud Paudavi (Professor of Economics, Nanyang University, Singapore), and Patti Mays Large Language Model (LLM) conducted a large-scale experiment using 9,030 submissions derived from 30 recently published economics papers to examine whether AI can mitigate these problems.
The analysis included studies from the top five economics journals, mid- and low-ranking publications, as well as AI-generated papers designed to mimic top-tier research, and the researchers systematically varied author attributes such as institutional affiliation, reputation, and gender to analyze the AI’s decision-making patterns.
The results suggest that “AI can effectively distinguish between different quality levels, suggesting the potential to reduce editorial workload,” but “AI evaluations show systematic biases that favor submissions from prestigious institutions, prominent economists, and male authors, even when the research content is the same, and AI struggles to distinguish between truly top-tier research and high-quality AI-generated papers, raising concerns about its ability to assess novelty and originality.” As a result of the study, they advocate a hybrid peer review model in which <AI supports initial screening but leaves the final decision to human reviewers> and <to ensure fairness, they recommend bias mitigation strategies such as improving AI training and evaluation criteria for anonymized data, highlight both the potential and risks of AI in academic publishing, and emphasize the need for careful integration to improve efficiency without compromising research integrity>, revealing the ‘unsafe complementary method’.
On the 6th, Jin Seong-jun, the floor leader of the Democratic Party’s policy committee, announced, “We will create a citizen participation fund of at least 50 trillion won targeting all economic entities such as citizens, companies, governments, and pension funds, and invest it intensively in stocks and bonds issued by domestic advanced strategic industry companies.”
On the 3rd, Representative Lee Jae-myung said, “Shouldn’t we invest in artificial intelligence (AI) now? “If some of that is held by the national fund or the state and the productivity generated there is shared equally among all citizens, then there is no need to collect taxes,” he said. “If a company like Nvidia were created, 70% would be held by the private sector and 30% would be shared by all citizens, wouldn’t a society that doesn’t necessarily have to rely on taxes come?” He added, “Working hours can be shortened (with AI). And they should be shortened. (Work) is the source of meaning in life, so we shouldn’t approach it only in terms of efficiency. Everyone should share the opportunity.”
He revealed that AI policies are “propaganda for stock investment incentives” through “military buildup by replacing mandatory military service with drone robots.”
The U.S. Air Force's drone unit is usually operated by three soldiers per drone, so this representative's claim that "there is no need for barracks" appears to be an intentional error, and corresponds to a military buildup due to the introduction of new weapons.
MIT researcher Pataranuttaphorn co-designed and taught one of the first MIT courses on “generative AI,” which was developed to provide the essential knowledge and skills needed to explore the frontiers of this new field, and co-organized the first workshop on virtual AI humans in 2021, which was attended by more than 1,600 people remotely and more than 200 in person.
German borrowing costs and stocks surged on Wednesday morning as investors digested Berlin’s historic defense and infrastructure spending increases.
The euro index rose on European markets after the three major German parties submitted their “investment fund bill” to the lower house of parliament.
In Europe, the euro zone’s benchmark 10-year bond yield surged more than 20 basis points (0.2 percentage points) on the 5th, trading just below 2.7% by midday.
The DAX index, a stock index of Germany’s major blue-chip companies, also rose 3.7%, effectively reversing the previous day’s 3.5% drop.
“The economic spillover effects were felt across Europe,” Eurocitiv reported, adding that “the STOXX Europe 600 index, a broad gauge of European stocks, rose 1.6%, while the euro index rose 0.7% to trade around €1.07 against the dollar.” “Markets are still digesting the tectonic shift in German fiscal policy,” Sander Tordoir, chief economist at the Centre for European Reform, told Eurocitizen, adding that investors “seem to be pricing in” Donald Trump’s tariff easing and revised growth forecasts.
European media reported that European markets swung yesterday after the major German parties announced unprecedented budget changes in postwar German history.
Pat Pattaranutaporn, a leading authority on the fluid interface of AI and human relationships, is a technologist and researcher at MIT (Massachusetts Institute of Technology) and co-director of the MIT Media Lab Advancing Human with AI (AHA) research program and author of AHA: Advancing Humanity through AI. His research lies at the intersection of AI and human-computer interaction, developing and researching AI systems that support human flourishing through multimodal systems with explainable feedback, and he demonstrates through large-scale experimental studies how AI can support human flourishing across a range of cognitive tasks, including reasoning, decision-making, learning, and self-development, according to his research homepage.
Nattavudh Powdthavee, PhD, Behavioral Economics and Economics of Happiness, Professor at Nanyang Technological University, Singapore, joined the German Institute for Labour Economics (IZA) in February 2010 and has held positions as Professor of Behavioral Sciences at Warwick Business School, Professorial Research Fellow at the Melbourne Institute of Applied Economics and Social Research, and Senior Research Fellow at the London School of Economics.
See <Extremist Economic Vision Lacks Far-Right Alternatives Lee Jae-myung ‘AI-Shortened Work, No Taxes’, March 3, 2025>