German companies anticipate AI-driven wage decreases for inexperienced workers

A study by the Ifo Institute involving over 3,000 German companies indicates that the widespread adoption of artificial intelligence (AI) is expected to impact wages, with many firms anticipating decreases rather than increases.

Research shows that workers with less than five years of experience are particularly vulnerable. Approximately 50% of companies using AI expect wage reductions for these employees. The impact varies significantly based on education and expertise; for instance, among workers with less than five years of experience and no university degree, 48.3% of companies anticipate lower wages, compared to only 5.9% expecting an increase.

Even among university graduates with limited experience, 50.8% of companies foresee a wage decline. The study suggests that AI may exacerbate income inequality, as the technology tends to value accumulated expertise and specialized skills while automating repetitive tasks often held by entry-level workers. Sectoral differences were also noted, with service providers reporting the highest expectations of wage decreases for less experienced staff at 53.3%.