A.I.’s Not a Job Killer So Far, But Raises and Hiring Are Down

By the Editorial Team · Thursday, September 17, 2026

Recent studies show that while artificial intelligence has not caused widespread unemployment in the U.S., it has led to slower wage growth and reduced hiring, especially for entry-level and lower-wage positions in AI-exposed occupations. This shift highlights growing challenges for younger and lower-earning workers as employers cut back on new hires and expect higher skills amid increased automation.

Despite widespread concerns about artificial intelligence displacing jobs, current data indicates that A.I.’s impact on the labor market has been more subtle than drastic job losses. While unemployment rates in the United States have remained low, recent research reveals that A.I. is contributing to slower wage growth and reduced hiring, especially in occupations highly exposed to the technology.

In May 2025, Dario Amodei, CEO of Anthropic, warned that A.I. could eliminate up to half of entry-level white-collar positions within five years, potentially pushing unemployment above 10 percent. However, as of August 2026, the U.S. unemployment rate stood at 4.1 percent, and job cuts have been limited. Instead, companies appear to be leveraging A.I. to enhance productivity while restraining salary increases and hiring rates.

A study by Princeton researcher Sania Edlich and Torsten Slok, chief economist at Apollo Global Management, examined wages and employment across 321 occupations. They found that workers in roles vulnerable to A.I. exposure have faced a 6.7 percent decline in real wage growth since 2023, with lower-earning and service workers disproportionately affected. For example, service jobs in administrative and support roles have seen wage growth decrease by roughly 24 percent, while earnings for the bottom quarter of workers dropped by 11 percent. Conversely, top earners have experienced minimal impact.

Rather than widespread layoffs, employers are choosing to hire less aggressively, particularly for young workers entering the labor market. Data from Liminal Capital shows that new hires aged 22 to 25 in A.I.-exposed jobs have declined by one-third since 2021, despite negligible changes in firing rates. This trend points to employers raising the bar for entry-level candidates, expecting additional skills or qualities beyond those easily replicated by A.I.

Melissa Krut, senior vice president at Sogolytics, highlighted how A.I. tools now perform many routine tasks, raising expectations for workers who must bring “a winning personality” or other distinguishing traits to secure raises or new positions. Echoing this, Ryan Close, CEO of Bartesian, reported that while A.I. has boosted his company’s revenue and streamlined operations, it has also led to reduced entry-level hiring and lower salary offers, reflecting a shift in bargaining power toward employers.

At the same time, the tech sector overall has experienced job losses, shedding about 48,000 positions over the past year, while financial services—a sector also heavily influenced by A.I.—has contracted by around 100,000 jobs since early 2026. Employment within financial firms is at its lowest share since 1981, indicating structural shifts in traditional industries heavily impacted by automation.

Although some companies specializing in A.I. development and management report increased demand for skilled workers, the broader picture suggests a labor market adjusting to A.I.-driven efficiency gains through wage suppression and more selective hiring rather than mass layoffs. As a result, some analysts caution that while unemployment remains low, job quality, wage growth, and opportunities for younger workers may be deteriorating in the evolving economy.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.