A June survey by the Munich ifo Institute of over 3,000 German companies that already use artificial intelligence (AI) finds many firms expect downward pressure on wages over the next five years — particularly for employees with less than five years of work experience and without tertiary qualifications.
Key findings
- Half of the AI-using companies expect wages for employees with less than five years’ experience to fall.
- About 40% of firms expect wage declines for employees with at least five years’ experience.
- Depending on employee qualifications, between roughly one-third and one-half of firms expect wages to remain unchanged.
Anna Ruffert, a researcher at the ifo Institute, noted that AI will not affect all employees’ wages equally: firms are most likely to expect wage reductions for less-experienced workers.
Sectoral differences
The survey shows sector-specific variation, with service companies most frequently anticipating wage falls:
- Services: 53.3% expect lower wages for workers with less than five years’ experience; 44.2% for those with at least five years.
- Trade: 47.9% (less than five years), 41.3% (at least five years).
- Manufacturing: 46.5% (less than five years), 38.9% (at least five years).
- Construction: 39% (less than five years), 31.3% (at least five years).
Differences by qualification
Firms are more likely to anticipate positive wage effects for employees with tertiary qualifications, especially when they also have longer professional experience:
- Among university-educated employees with at least five years’ experience, 26% of AI-using firms expect a favorable wage impact.
- For university-educated employees with less than five years’ experience, 16.3% of firms expect wage increases.
- For non-degree employees with short experience, only 5.9% of firms expect positive wage effects.
Sectoral shares of firms expecting positive wage effects for degree-holders (short experience / long experience):
- Construction: 24% / 29.8%
- Services: 14.9% / 27.3%
- Trade: 15.9% / 24.9%
- Manufacturing: 15.6% / 24.2%
Relevance for Hungary
The ifo findings are significant for Hungary because recent data show German companies employ roughly 300,000 people in Hungary and account for about one-sixth of Hungarian GDP. Therefore, wage expectations and AI adoption patterns in German firms could indirectly influence the Hungarian labour market and income distribution.
Conclusion
The ifo survey suggests that the spread of AI may substantially reconfigure wages: less-experienced, especially non-degree workers face a higher probability of wage declines, while higher qualifications and longer experience increase the chance of stable or rising wages in several sectors. The scale and direction of changes will vary by industry and worker group.
