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European study finds AI poses higher wage threat than job threat

A recent study conducted by the European Central Bank (ECB) suggests that fears of artificial intelligence (AI) replacing human jobs may be exaggerated. The paper analyzed the impact of AI technology on employment shares in 16 European countries from 2011 to 2019, specifically focusing on deep learning advancements. The findings indicate that opportunities for younger and high-skilled workers actually increased during this period, while low- and medium-skill jobs remained largely unaffected.

Although the ECB warns that these findings do not provide a definitive conclusion, it highlights that AI-enabled technologies have not yet led to a significant decline in human labor. The study acknowledges that breakthroughs in language processing, image recognition, algorithm-based recommendations, and fraud detection have triggered a technological revolution, with the recent development of generative AI models like OpenAI's ChatGPT further accelerating this progress.

The research also indicates some negative effects on wage growth for occupations more exposed to AI. While the employment share of sectors exposed to AI increased, the impact on wages was described as neutral to slightly negative. However, the study suggests that the full impact of AI on employment, wages, growth, and equality is yet to be seen.

This study contrasts with previous technological advancements, such as computerization, which resulted in a decrease in the employment share of medium-skilled workers and polarization. Although the findings are not conclusive, they provide hope for American workers who worry about AI replacing humans in their careers.

A recent survey conducted by Spokeo further supports this sentiment, revealing that two-thirds of respondents believe AI could perform their workplace duties. However, it also found that American workers are optimistic about the potential benefits of AI, with many believing it could reduce job-related stress and working days.

Overall, while AI technology has raised concerns about job loss, the current evidence suggests that it is actually creating opportunities for younger and high-skilled workers. However, the impact on wages remains a cause for concern. As AI continues to develop and be adopted, its complete effects on employment and wages are yet to be seen.

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