How the AI impact on labor market is Quietly Reshaping Jobs
The AI impact on labor market is not showing up as massive layoffs, but rather through a quieter disruption: suppressed wage growth and a sharp decline in new hiring. Despite U.S. unemployment holding at a low 4.1% as of August, the reality across specific occupations tells a different story. Princeton researcher Sania Adilich and Apollo Global Management Chief Economist Torsten SlΓΈk analyzed 321 job types and found that highly AI-exposed roles saw little overall change in headcounts over the past three years, but experienced a clear slowdown in wage increases. Researchers noted that corporations are absorbing productivity gains from artificial intelligence by curbing labor cost increases rather than slashing workforces. Real wage growth for high-AI-exposure roles has dropped by 6.7% since 2023. Low-wage workers have taken the hardest hit, with real wage growth in administrative and support services plunging by 24%, and workers in the bottom 25% income bracket seeing an 11% reduction. Meanwhile, high-income earners have faced relatively little impact.
Corporate Hiring Shifts and the Demand for Advanced Skills
Instead of firing existing staff immediately after boosting productivity through artificial intelligence, businesses are maintaining current staff levels while hiring fewer new employees than before. For instance, Virginia-based software firm Sogolytics has grown both its customer base and productivity over the past three years without proportionally increasing its headcount, largely because AI can handle over half of baseline tasks. Consequently, expectations for new hires are rising. Simply handling repetitive tasks is no longer enough; workers must possess additional skills that artificial intelligence cannot easily replace, according to reports by the Korea Daily.
