A bulletin by the ECB says AI has had a negative impact on earnings. Image: Pixabay

A.I. won’t take your job, but it might reduce your wages – research

The rapid adoption of artificial intelligence (AI) could reduce wages, but so far is actually creating, not destroying jobs.


A bulletin by the ECB says AI has had a negative impact on earnings. Image: Pixabay

This effect of AI is especially true for the young and highly-skilled, according to research published by the European Central Bank (ECB).

Firms have invested heavily in AI, leaving economists trying to understand the impact of AI on the labour market and stirring fears among the wider public about the future of their jobs.

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At the same time, employers are struggling to find qualified workers, despite a recession that would normally ease labour market pressures.

Who is most exposed to AI?

In a sample of 16 European countries, the employment share of sectors exposed to AI increased, with low- and medium-skill jobs mostly unaffected. Highly-skilled roles have been getting the biggest boost.

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The research bulletin by the ECB also cited “neutral to slightly negative impacts” on earnings, and said that could increase.

“These results do not amount to an acquittal,” the paper said. “AI-enabled technologies continue to be developed and adopted. Most of their impact on employment and wages – and therefore on growth and equality – has yet to be seen.”

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The findings were in contrast to previous “technology waves,” it said, when computerisation led to a decline in the employment share of medium-skilled workers, causing polarization in the job market.

Using tech for good

Meanwhile, recent advances in AI have created a significant change in how to measure poverty and human development. Using a type of AI known as a deep convolutional neural network (DCNN), it can study satellite imagery and identify some types of poverty with a level of accuracy close to that of household surveys.

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The use of this AI technology could help, for example, in developing countries where there has been a rapid change of land use. The AI could monitor via satellite and potentially spot areas that are in need of aid. This would be much quicker than relying on ground surveys.