German firms using AI expect wage cuts for junior workers, Ifo survey finds

Survey scope and method

The Ifo Institute for Economic Research at the University of Munich surveyed more than 3,000 German companies already using artificial intelligence in a poll conducted in June 2026. The findings, released on 12 August 2026, reveal that German firms deploying AI expect its growing use to depress wages over the next five years, especially for junior workers. Ifo researcher Anna Ruffert said that, overall, significantly more companies expect negative effects than positive ones.

Junior workers bear the brunt

The survey shows a clear split along experience lines. About half of businesses using AI predicted falling wages for employees with fewer than five years of experience. For graduates with less than five years of experience, 50.8% of companies expect declining wages, while 16.3% expect increases. For non-graduates with under five years of experience, 48.3% of firms expect wage declines, and only 5.9% expect increases.

For workers with at least five years of experience, the outlook is better but still predominantly negative. Among non-graduates with five or more years of experience, 40.4% of firms expect wage cuts, and 9.7% expect increases. Among graduates with five or more years of experience, 37.5% of companies still expect wage declines, but 26% anticipate increases, the highest share of any group expecting gains.

Sectoral differences

The Ifo also observed sectoral differences for employees without a university degree. Service-sector firms are the most pessimistic: 53.3% expect wage cuts for inexperienced non-graduates, and 44.2% for experienced non-graduates. In retail, the figures are 47.9% and 41.3%, respectively. In manufacturing, 46.5% expect declines for inexperienced non-graduates and 38.9% for experienced ones. Construction firms are the least likely to expect AI-driven wage declines: 39% for inexperienced workers and 31.3% for experienced workers.

Broader labor market context

The findings come as debate intensifies over AI-driven disruption in the economy. The International Labour Organization (ILO) noted that jobs through which many young people enter the workforce, such as clerical and administrative roles, sales, service-sector positions, production, and some technical occupations, could change particularly quickly due to automation and generative AI. The ILO states that some of these jobs will remain but will impose new requirements, including digital skills, the ability to control AI outputs, and understanding when human judgment remains necessary. At the same time, demand is growing in knowledge-intensive technical fields, including natural sciences, engineering, healthcare, and information and communication roles.

From the perspective of many companies, artificial intelligence will not affect the wages of all employees in the same way. They most frequently expect wage declines for less experienced workers.