A recent survey by the Ifo Institute indicates that many German companies expect wages to decline over the next five years due to the adoption of Artificial Intelligence (AI). Among those companies that currently utilize AI, approximately one in two reports that workers with less than five years of professional experience are likely to face reduced wages. Furthermore, about 40 percent of workers with at least five years of experience anticipate wage cuts.
However, the outlook is not uniform. According to Ifo researcher Anna Ruffert, a third to half of the surveyed companies predict stable wages, depending on the employees’ qualifications. Ruffert noted that AI will impact salaries differently across all job groups, with less experienced workers being the most likely to see wage reductions.
The service sector is the industry most frequently expecting pay cuts. For employees with short experience, 53.3 percent of service providers anticipate lower wages, while for those with longer experience, the figure is 44.2 percent. Among retailers, the rates are 47.9 percent and 41.3 percent, respectively, followed by the manufacturing industry at 46.5 percent (short experience) and 38.9 percent (long experience). Construction companies reported less commonly that AI would lead to wage drops, citing 39 percent for short-experience workers and 31.3 percent for those with longer careers. These statistics apply to employees without (technical) university degrees.
For employees who hold a (technical) university degree, expectations for a pay decrease are minimal. Conversely, these workers have a greater opportunity for wage growth, especially when combined with years of experience. Twenty-six percent of companies anticipate that AI usage will have a positive impact on the salaries of this group, and at the short-experience level, 16.3 percent see salary improvements-compared to just 5.9 percent among low-skilled workers with brief professional histories. Ruffert explained that companies are more likely to find positive wage effects through AI possible for workers with formal qualifications, particularly when they also possess substantial experience.
Construction companies using AI are notably more likely to expect rising wages for highly qualified staff. Among those with short experience, the rate is 24.0 percent, rising to 29.8 percent for those with more than five years of experience. Similar positive trends are observed in other sectors: service providers report increases at 14.9 percent and 27.3 percent; the retail sector reports 15.9 percent and 24.9 percent; and the manufacturing industry reports 15.6 percent and 24.2 percent.
