The wages of American workers are under pressure. AI's potential role is drawing more attention
Wage growth for workers has slowed and is struggling to keep up with inflation, drawing attention to AI's potential role even as evidence remains incomplete.
TL;DR
- Job growth exceeded expectations in August, but wage growth has lagged behind inflation.
- Some economists are questioning if AI could pressure wages before causing job losses.
- Data shows inflation-adjusted wages and salaries decreased year over year through June, and labor's share of business output is at a historical low.
- A study by Apollo Global Management suggests workers in AI-exposed occupations experienced significantly slower real-wage growth post-2023 compared to those in less-exposed occupations, with no statistically significant employment effect.
- Experts caution that the evidence is limited, and factors like post-pandemic normalization in sectors like tech may also influence wage and employment trends.
- The impact of AI on jobs may depend on whether it takes on an expert or non-expert aspect of a job, with some occupations becoming more specialized and better paid while others become more open but less lucrative.
- Younger workers with less experience may be more susceptible to AI-driven wage pressure, as AI can substitute for entry-level tasks.
- There is a call to shift the framing from 'AI vs. human workers' to 'pro-worker AI,' which would involve investments and policy frameworks to create new tasks and expertise for workers.