Job Destruction? No, Artificial Intelligence Threatens Workers’ Wages

Research released by the European Central Bank on Wednesday indicates that the rapid expansion of artificial intelligence (AI) could reduce wages. So far, AI has not only spared jobs, especially for young people and those with high skills, but has also created new jobs.

Companies have invested heavily in AI, while economists have initiated new efforts to understand its impact on the labor market and instill fear among people about their job prospects in the future.

Despite the economic recession that usually reduces labor market pressure, employers are making significant efforts to find qualified employees.

The European Central Bank states: “In a sample of 16 European countries, the share of employment in sectors affected by artificial intelligence has increased. Jobs with low and medium skills were mostly unaffected.

Jobs with high skills have been most affected.” The bank also pointed to a neutral to slightly negative impact on income, suggesting that the impact may increase.

The European Central Bank says these findings do not absolve AI of potential negative effects. The development of AI continues, and its greatest impact on employment and wages has yet to be seen.

These findings contradict previous “technology waves” when computerization reduced the share of employment for medium-skilled workers and led to polarization and separation of groups.