Worker pay, already failing to keep pace with cost-of-living increases, is at risk of being further suppressed as artificial intelligence and other technologies threaten to automate 27% of existing jobs in wealthy countries.
that far outpace the rising costs of doing business, padding their bottom lines at the expense of working-class consumers."Going forward," the report notes,"evidence suggests there is some room for profits to absorb further wage adjustments to recover some of the losses in purchasing power gradually without generating significant price pressures or resulting in a fall in labor demand.
The report estimates that 27% of existing jobs in OECD countries are at high risk of automation, from AI and other technologies. If even a fraction of those jobs are automated, it could lead to a surge in unemployment—weakening workers' bargaining power in relation to employers and setting the stage for further wage repression.
According to the report, 63% of finance workers and 57% of manufacturing workers are worried about job loss due to AI in the next 10 years.Wage policies such as minimum wages and collective bargaining can help mitigate losses in purchasing power. Governments can also provide direct support through the tax and benefit system to protect low-income households' net income.
Tight labor markets typically improve workers' bargaining power, yielding wage gains. But despite historically low unemployment rates in many OECD countries, the report finds that real wages across the bloc declined 3.8% between the first quarter of 2022 and the first quarter of 2023.
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