European Central Bank Research: Potential For Wage Reductions, But AI Will Create New Jobs

JAKARTA - Research published by the European Central Bank on  Tuesday, November 28, shows that the rapid adoption of artificial intelligence could reduce wages. However, until now it has actually created jobs, especially for young and highly knowledgeable people.

Companies have invested heavily in artificial intelligence (AI) technology, leaving economists scrambling to understand its impact on the labor market and sparking concern among the general public about the future of their jobs.

At the same time, employers are having difficulty finding qualified workers, even in a recession that should ease labor market pressures.

In a sample of 16 European countries, the share of jobs in sectors exposed to AI increased, with low- and middle-knowledge jobs largely unaffected and high-knowledge positions getting the biggest boost, according to the Research Bulletin published by the ECB.

However, the study also cited a "neutral to slightly negative impact" on revenue and said it could increase.

"This result does not constitute an acquittal," the report said. "AI-enabled technologies continue to be developed and adopted. Much of their impact on jobs and wages – and therefore on growth and equality – remains to be seen."

These findings contrast with previous “technological waves,” he said, when computerization reduced “the relative share of jobs for middle-class knowledge workers, resulting in ‘polarization.'