A recent article published by The New York Times examined whether artificial intelligence tools have disrupted American employment levels. Written by Ben Casselman and titled A.I. Was Supposed to Come for Our Jobs. So Far, Evidence Is Mixed, the piece explores the central labor market question of whether automation is actively replacing workers. Yet, despite capturing the current confusion surrounding hiring trends, the analysis completely omits the word wages and misses how these technologies influence employee compensation.
Key takeaways
- The New York Times article questioned whether AI causes employment disruptions without mentioning wages.
- JPMorgan strategist David Kelly noted that worker fear of AI prevents them from demanding wage increases.
- A Federal Reserve Bank of Boston study found workers fearing AI job loss lack negotiating leverage.
- Annual inflation was 3.7% in September, while wages rose just 3.1%, leaving workers making less in inflation-adjusted terms.
Examining the Employment Data and White-Collar Hiring Trends
The broader economic data presents a mixed picture of how automation interacts with the workforce. Casselman notes that Microsoft recently offered voluntary buyouts to about 60,000 employees. Conversely, white-collar industries including accounting, legal services, and finance mostly added jobs in October. Furthermore, the United States economy added 165,000 jobs in October, exceeding expectations and pushing the unemployment rate down to 4.1 percent. These figures demonstrate that the labor market is not suffering from the historical double-digit unemployment seen during severe economic downturns. Companies may be using AI to replace workers, pressing pause on hiring to determine where tools are most useful, or redirecting funds toward tokens and AI infrastructure while cutting costs elsewhere.
Despite these resilient employment figures, traditional economic cycles have been upended. Ordinarily, low unemployment numbers result in rising wages because scarce labor forces companies to offer higher salaries to attract talent. Workers also feel confident asking for raises or switching jobs. Instead, wage growth has stalled, rising just 3.1 percent over the past year according to the Bureau of Labor Statistics, while the annual inflation rate reached 3.7 percent in September. Consequently, workers are making less today than they were a year prior when adjusted for inflation.
The Psychological Impact on Worker Leverage and Pay Negotiations
The true function of artificial intelligence in the modern job market involves its use by employers to suppress compensation and keep personnel compliant. Executive commentary reveals how this psychological pressure operates in practice. Appearing on CNBC in September, David Kelly, the Chief Global Strategist at JPMorgan Asset Management, offered a candid assessment of worker sentiment. Kelly stated that workers view the economy as scary, feel threatened by AI, and lack the guts to demand wage increases. CNBC host Leslie Picker agreed, noting that workers recognize machines can perform tasks cheaper, encouraging them to keep their heads down.
This dynamic is backed by empirical research. A study published by the Federal Reserve Bank of Boston in September found that employees who feared losing their jobs to artificial intelligence were significantly less likely to believe they held the leverage required to negotiate higher pay. Kelly pointed out that the year-over-year wage number was the lowest recorded since May of 2021, illustrating that a tight labor market by statistical metrics fails to feel tight to workers who perceive their bargaining power has evaporated.
Broader Implications for the American Middle Class
Mainstream discussions surrounding artificial intelligence frequently focus on dramatic existential extremes, debating whether the technology will destroy humanity or push everyone into unemployment. This framing often obscures more mundane economic outcomes that threaten financial stability. Rather than triggering catastrophic mass layoffs, AI risks hollowing out the middle class over a decade of diminished quality of life driven by effective wage suppression. While retirement trends among massive demographic cohorts like baby boomers may keep headline unemployment numbers from spiking, the ruling class accumulates immense wealth while the average American faces a lower standard of living. Financial networks observe these shifting power dynamics clearly, even as mainstream reports continue to overlook the erosion of worker leverage.
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