AI is driving productivity and wage increases: Report

Business sectors using artificial intelligence are seeing significant gains in productivity while AI skills are commanding higher wages, according to a new PwC report.

Industries such as financial services, information technology, and professional services are seeing labor productivity growth nearly five times greater than industries with less AI integration, the consulting firm said in a statement.

The report also highlights that jobs requiring AI expertise are associated with a considerable wage premium in major labor markets, including the US, the UK, Canada, Australia, and Singapore.

In the US, for example, these positions can offer an average of 25% higher salaries than non-AI jobs. The wage premium varies across professions, reaching 18% for accountants, 33% for financial analysts, 43% for sales and marketing managers, and 49% for lawyers.

This wage disparity is consistent across all analyzed markets, with AI skills consistently valued higher.

The report, analyzing over half a billion job advertisements across 15 countries, indicates that AI could enable many nations to overcome long-standing low productivity growth. This could lead to economic development, higher wages, and improved living standards, PwC added.

Upskilling imperative

The report also pointed out that job postings for AI-related positions are increasing 3.5 times faster than the overall job market. For every AI job listed in 2012, there are now seven.

However, the situation also demands more effort in skill development. Occupations significantly exposed to AI are experiencing a 25% faster change in skill requirements compared to those less exposed to it.

A separate PwC survey of CEOs showed that 69% of respondents anticipate AI will necessitate new skills from their workforce. This expectation increases to 87% among CEOs who have already implemented AI technologies.

“Businesses and governments around the world will need to ensure they are adequately investing in the skills required for both their people and organizations if they are to thrive in a global economy and labor market being transformed by AI,” Pete Brown, global workforce leader at PwC UK said in the statement.

Impact of AI on jobs

The latest PwC report comes amid mounting concerns over the potential for significant job losses due to the increasing use of AI.

In June last year, Goldman Sachs reported that up to 300 million jobs in the US and Europe could be at risk due to AI advancements. The analysis suggested that two-thirds of US jobs may see partial automation, with up to a quarter of current tasks potentially being fully automated.

In the previous month, IBM had announced plans to cut 7,800 jobs over five years because of AI, heightening fears of widespread job displacement across various sectors.

Additionally, a December 2023 report from Kaspersky Research revealed that 40% of surveyed C-level executives intend to deploy generative AI tools like ChatGPT to address skill shortages by automating tasks.

In January of this year, Google also signaled potential job cuts as it shifted its focus towards emerging technologies, including AI. However, in contrast to these reports, a study from MIT released the same month argued that employing humans remains substantially more cost-effective for most jobs in the US.