Wednesday, December 3, 2025

AI benefits capital owners more than workers

A recent study shows the benefits of AI are not evenly distributed, with workers, particularly those in high- and medium-skill occupations, experience declining income shares

AI is reducing labour’s share of total income, new research from Vienna University of Economics and Business (WU Wien) has found. In a study of European regions, Klaus Prettner, Professor of Macroeconomics at WU Wien, and his fellow researchers found that with every doubling of regional AI innovation, the share of income going to workers declines by between 0.5% and 1.6%.

Overall, observed levels of AI innovation can explain a reduction in workers’ share of income of up to 0.31 percentage points since 2000. The effect is mainly driven by worsening wage and employment conditions for high-skill labour, and less so by wage compression for medium- and low-skill labour. 

Workers worse off
The results of the study show that the benefits of AI are not evenly distributed, with the gains going disproportionately to capital owners, while workers, particularly those in high- and medium-skill occupations, experience declining income shares.

“This study challenges the wide-held assumption that AI benefits skilled workers the most”, says Professor Prettner.” Instead, it reveals that AI-driven automation often substitutes for cognitive tasks typically performed by medium- and high-skill workers, reducing their wage growth and their job security. By contrast, low-skill workers, though facing lower wages, may see modest gains in employment due to demand for roles that are difficult to substitute by AI systems.”

The authors note that without policy intervention, technological progress could further entrench regional and social divides, deepening inequality across Europe.

Find out more
The peer reviewed version of the study appeared in the European Economic Review and can be read here.

Latest

Essential reads for the business leader’s seasonal downtime

From roadmaps for CEOs and directors, to transformative leadership...

Latest expansion advances Oritain’s mission to be source of global supply chain truth

Acquisitions of European labs and new membership model positions...

Use of in-house carbon reporting tools problematic for climate action

Firms prefer in-house carbon reporting tools, even if they...

The invisible shift in risk management

The smartest organisations are now managing risk through an...

Subscribe To Our Content

Don't miss

Essential reads for the business leader’s seasonal downtime

From roadmaps for CEOs and directors, to transformative leadership...

Latest expansion advances Oritain’s mission to be source of global supply chain truth

Acquisitions of European labs and new membership model positions...

Use of in-house carbon reporting tools problematic for climate action

Firms prefer in-house carbon reporting tools, even if they...

The invisible shift in risk management

The smartest organisations are now managing risk through an...

SnapLogic eliminates legacy migration costs by up to 80% with new tool

SnapLogic Intelligent Moderniser clears the path to AI adoption...

Essential reads for the business leader’s seasonal downtime

From roadmaps for CEOs and directors, to transformative leadership guides, enter 2026 with renewed confidence with these cutting-edge reads from brilliant business minds    In...

Latest expansion advances Oritain’s mission to be source of global supply chain truth

Acquisitions of European labs and new membership model positions Oritain to scale origin verification across the world’s most critical supply chains Oritain, a global leader...

Use of in-house carbon reporting tools problematic for climate action

Firms prefer in-house carbon reporting tools, even if they aren’t as accurate as standardised ones, say researchers, who recommend regulators strengthen laws Companies that...

LEAVE A REPLY

Please enter your comment!
Please enter your name here