Artificial intelligence (AI) could diminish wage bargaining power and change the type of skills employers demand, according to a report that recommends an increased focus on re-skilling to tackle the challenges new technology brings.
Insurance company Allianz Trade warned that the increasing use of AI “threatens better-skilled, higher-earning workers, who have traditionally benefitted from greater digitalisation”, and that public policies were needed to maximise the advantages of new tech while protecting jobs.
Its report, No quick wins: more jobs but little productivity in the Eurozone, said that AI will change the skills that employers require, but will benefit workers that either have the skills to use AI productively, or the skills technology cannot replace (creativity, social skills and management).
It suggested that countries better positioned to integrate new technologies without widespread job and wage losses were those that have stronger trade unions or higher rates of collective bargaining.
It challenged the perception that some jobs will be “automated away” by AI, instead suggesting that most occupations are likely to be transformed by new technology, but the extent to which will depend on the degree of AI adoption and the tasks it is used for.
Traditional relationships between employers and employees will be disrupted, the report suggested, and there is likely to be a rise in gig-style roles which “de-link employers from workers and often anonymize them, making them fungible”.
To mitigate against AI having an adverse impact on employment and wages, the report recommended that labour market policies needed to focus on up-skilling and re-skilling.
“Reskilling has already successfully enabled credit analysts to become data analysts, or workers in the fossil fuel industry to transfer their expertise to renewable energy generation, especially in areas of adaptive skills (and close occupational proximity). For instance, reskilling of an accountant clerk to a cybersecurity officer currently takes approximately six months,” the report claimed.
It said that education policies needed to be reformed so that pupils have the skills needed to participate in a global digital economy. ‘Bridging’ from education to employment could help close some skills gaps.
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