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AI Limiting European Workers’ Bargaining Power, ECB’s Lane Says
Lane said AI investment is tightening financing conditions and may slow wage growth as euro-zone firms weaken workers’ bargaining power.
- On Tuesday, European Central Bank Chief Economist Philip Lane said increased artificial intelligence usage by companies in Europe could curb workers' ability to demand higher wages while tightening financing conditions.
- With inflation running at nearly twice the ECB's 2% target, policymakers search for wage-growth signals; muted hiring plans limit workers' ability to demand compensation for high inflation, Lane said.
- Heavy global borrowing to fund artificial intelligence is pushing up long-term interest rates, which Lane said "constitutes a material tightening of financial conditions for the euro area."
- Some economists suggest the ECB may need to do less to tame price growth, since tighter financing conditions help prevent inflation from becoming embedded in the economy.
- Over the longer term, Lane said artificial intelligence could raise the economy's potential "speed limit" and help Europe offset the economic impact of a projected working-age population decline.
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AI limiting European workers' bargaining power, ECB's Lane says
·London, United Kingdom
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THE APPLICATION of AI in the eurozone is weakening the bargaining power of workers, and investments in technology are raising the cost of borrowing for everyone, warns the ECB's chief economist, Philip Lane.
·Zagreb, Croatia
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ECB's Lane warns AI could weaken euro-area wage bargaining
Philip Lane, who serves as an Executive Board member of the European Central Bank (ECB), issued a warning on October 13 about the potential impact of artificial intelligence on the bargaining power of workers, even in times when workers do not experience mass job losses. Wage growth and labour income share will deteriorate before the...
With regard to the labour market, Philip Lane still sees no major change in aggregate employment trends
·São Paulo, Brazil
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Coverage Details
Total News Sources15
Leaning Left2Leaning Right1Center2Last UpdatedBias Distribution40% Left, 40% Center
Bias Distribution
- 40% of the sources lean Left, 40% of the sources are Center
40% Center
L 40%
C 40%
R 20%
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