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AI Limiting European Workers’ Bargaining Power, ECB’s Lane Says
Lane said AI may weaken workers’ bargaining power and raise long-term borrowing costs, adding pressure to wage growth and ECB policy.
- On Tuesday, European Central Bank Chief Economist Philip Lane stated that while AI could boost long-term growth, heavy corporate investment is currently tightening financial conditions and curbing workers' ability to demand higher wages.
- With inflation remaining near twice the ECB's 2% target due to expensive energy, policymakers are searching for signs of second-round price effects but have concluded none exist in wage growth.
- Lane said in a speech in Dublin that the potential for AI to replace certain workers weakens their bargaining power, "moderating wage growth and reducing the labour share in total income."
- Global companies borrowing heavily to fund AI are pushing up long-term interest rates, which Lane said constitutes "a material tightening of financial conditions for the euro area" relevant to ECB policy.
- For Europe, the potential for AI to offset the projected trend decline in the working-age population is especially valuable, as Lane said the technology could increase the economy's potential "speed limit.
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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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The increased use of artificial intelligence (AI) by Eurozone companies may limit workers' ability to demand higher wages.
AI limiting European workers’ bargaining power, ECB’s Lane says
FRANKFURT, Oct 13 : The increased use of AI by euro zone companies could curb workers’ ability to demand higher wages while heavy investment into the new technology may be materially tightening financing conditions, ECB chief economist Philip Lane said on Tuesday. With inflation now running at nearly twice the ECB’s 2 per cent target […]
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Total News Sources11
Leaning Left2Leaning Right0Center2Last UpdatedBias Distribution50% Left, 50% Center
Bias Distribution
- 50% of the sources lean Left, 50% of the sources are Center
50% Center
L 50%
C 50%
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