Study suggests German companies expect wages to decline due to AI

Many companies in Germany expect wages to decline as a result of artificial intelligence (AI) adoption, according to a study released by a leading economic institute on Wednesday.

"Overall, we see that significantly more companies anticipate negative effects than positive ones," said Anna Ruffert, a researcher with the Munich-based ifo Institute.

She was summarizing the results of a survey of more than 3,000 companies in Germany that already use AI.

About half of the companies expect such a trend over the next five years for employees with less than five years of professional experience. Even for experienced employees, the number of companies expecting wages to fall outweighs those anticipating an increase.

There are some significant differences depending on professional experience and qualifications. Among employees with less than five years of professional experience and without a university or technical college degree, 48.3% of companies expect wages to fall, while only 5.9% expect them to rise.

For those with a university degree and little experience, 50.8% of companies expect wages to fall and only 16.3% expect them to rise.

"From the point of view of many companies, artificial intelligence will not affect salaries equally for all employees," Ruffert said. "They are most likely to expect salaries to fall for less experienced workers."

There are also significant differences depending on the industry. The impact is weakest in the construction sector, where only 39% expect wages to fall for employees with little work experience, and 31.3% for those with more experience.