AI threatens wages, not jobs so far, European Central Bank paper finds

The rapid adoption of artificial intelligence (AI) could reduce wages, but so far is not creating jobs, especially for young and highly skilled people, according to research published by the European Central Bank on Tuesday.

Companies have invested heavily in artificial intelligence, leading economists to strive to understand the impact on the labor market and increasing the general public’s fears about the future of their jobs.

At the same time, employers are struggling to find qualified workers, despite a recession that would normally ease pressure on the labor market. In a sample of 16 European countries, the employment share of sectors exposed to AI has increased, with low- and mid-level jobs largely unaffected and high-skilled positions receiving the biggest boost, according to a Research Bulletin published by the ECB.

But the report also cited “neutral to slightly negative impacts” on profits and said they could increase. “These results do not lead to an acquittal,” the newspaper said. “AI-based technologies are still being developed and deployed. Most of their impact on employment and wages and therefore on growth and equality has yet to materialize.” The findings contrasted with previous “waves of technology,” when automation “reduced the relative share of employment of middle-skilled workers, resulting in “polarization.”