AI limiting European workers’ bargaining power, ECB’s Lane says - WTVB

FRANKFURT, Oct 13 (Reuters) – 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% target on expensive energy, policymakers are searching for signs of second-round price effects, but have so far concluded there are none, especially in wage growth. While AI has not changed employment ‌trends, ​hiring plans are muted and this limits ⁠workers’ ability to demand compensation ⁠for high inflation, Lane said, offering a potential explanation for why wage growth is slowing, despite high inflation.