German Companies Expect AI to Lower Wages for Less Experienced Workers

A major study by the ifo Institute analyzing over 3,000 German companies using artificial intelligence (AI) reveals a growing expectation that AI adoption will predominantly depress wages, especially for workers with less than five years of experience. Approximately half of the companies surveyed anticipate wage reductions for this less experienced group over the next five years. Furthermore, around 40% of these companies foresee pay cuts for more seasoned employees as well.

The study highlights that wage impacts vary significantly by employee qualification and sector. While a third to half of companies expect wages to remain stable depending on qualifications, service sector firms are notably pessimistic, with 53.3% predicting wage drops for less experienced staff. Conversely, about 26% of companies predict wage increases for workers holding (technical) university degrees, particularly those with longer tenure.

Anna Ruffert, a lead researcher at the ifo Institute, emphasized that the consequences of AI on wages are uneven, disproportionately affecting less experienced workers. These findings are based on the June 2026 ifo Economic Survey, indicating immediate concern within the German labor market about how AI technologies will influence compensation.

This nuanced view underscores that while AI promises efficiency and innovation, its integration risks widening wage disparities based on experience and education levels. Companies adopting AI appear to expect that higher skilled and more experienced employees may benefit, whereas newer workforce entrants could face declining pay. The overall picture for German businesses is one of cautious anticipation, balancing AI’s advantages with the potential social costs around employment and wage dynamics.