A new study developed by Stanford University highlighted that the integration of Artificial Intelligence in the workplace can reduce wage inequality.

According to details of the analysis, this system not only substantially reduces wage inequality, but also helps increase average wages by up to 21%. “Artificial intelligence is changing what tasks workers perform and how they perform them,” emphasizes Hugo Reichardt, a professor affiliated with the Barcelona School of Economics, who conducted the work in conjunction with Lukas Althoff. The researchers stated in their report that to understand and predict how AI will impact the labor market, it is crucial to first determine the technical shift in worker productivity in their assigned areas and tasks. According to Reichardt and Althoff, workers are adapting and acquiring new skills that lead to higher wages and overall wage parity. “The simplification brought about by the use of AI increases the relative productivity of less-skilled workers in tasks and occupations that were previously the domain of more highly skilled workers. This reduction in skills-based barriers is the key force reducing inequality,” they said. Furthermore, the researchers highlighted not only the reduction in wage inequality but also improvements in worker well-being, noting that AI generates considerable gains in this area. “We estimate that the improvements in well-being equate to permanent wage gains of between 26% and 34% for most workers,” they stated. Finally, they mentioned that the key finding of their research is that the impact of AI, along with workers' responses to it, significantly alters the occupational landscape. “AI generates a large reallocation of employment across occupations.”