Philip Lane, an Executive Board member of the European Central Bank (ECB), warned on October 13 that artificial intelligence could erode workers' bargaining power even in the absence of mass job losses. According to Lane, wage growth and labour's share of income are likely to come under pressure before employment statistics reveal that any such shift has taken place. His remarks come as AI adoption spreads rapidly through euro-area workplaces. Wage developments are among the indicators the ECB monitors as part of its inflation analysis, which gives the warning significance well beyond individual pay negotiations.

Weaker pay power before weaker payrolls

Lane argued that the ability to substitute workers with AI could tilt wage negotiations further in employers' favour, allowing companies to restrain pay even while overall employment remains intact. At the same time, the ECB does not currently observe major changes in employment trends, nor precise productivity improvements across the economy.

ECB research shows that AI use among employees in the euro zone climbed from 26% in 2024 to 52% in 2026, and that the typical AI user can save up to three hours a week. Those time savings, however, do not necessarily translate into productivity increases. The sequencing Lane describes makes wage-negotiation outcomes the data series where any such effect would first become visible.

Who captures the productivity gains

Who actually captures AI-driven productivity gains remains an open question. A PwC survey of nearly 50,000 respondents found that almost twice as many participants said their bargaining position had weakened rather than improved. The firm's "engine room"—the 56% of surveyed professionals with limited access to both AI tools and career advancement opportunities—reported a 7% drop in trust in management.

Pay data still favours AI skills. According to PwC's jobs barometer, jobs requiring AI skills command an average wage premium of 62%, although the study does not establish causation. Occupations it classifies as "professionalised" have grown twice as fast in number as "democratised" jobs, and their wages have risen 42% since 2021.

Taken together, the survey and pay data sketch a split labour market: AI skills command premium pay even as many workers report a weakening hand. Research published in the European Economic Review likewise finds that increased AI use reduces the share of income going to labour, echoing Lane's warning.

Little sign of mass job losses so far

Evidence of widespread layoffs remains limited. A Stanford study found that US unemployment rose by 0.77 percentage points since 2022 among workers most exposed to AI, compared with 0.85 percentage points among those least exposed over the same period—suggesting broader labour-market weakness rather than a distinct AI-driven shock.

Recent graduates face tougher conditions than the workforce overall. Their unemployment rate reached 5.6% in early 2026, a 1.6 percentage point increase over three years. Stanford also urged caution on forecasts of imminent AI-driven mass layoffs, including the prediction by Anthropic CEO Dario Amodei that AI would displace half of all white-collar positions and drive unemployment to 20%.

Europe's funding gap and the AI valuation risk

Lane also flagged financing hurdles for Europe. US investment grew almost twice as fast as euro zone investment over the last two years, he said, and ECB analysis indicates that companies relying on AI in their operations are shifting toward market-based financing. That shift carries extra weight in the euro zone, where corporate funding has traditionally leaned more on bank credit than in the more capital-market-driven United States. Elevated borrowing costs driven by bank interest rates add further pressure on firms that depend on bank lending.

Meanwhile, the IMF's October Global Financial Stability Report warns that disappointing returns on AI investments could trigger a market correction, amplified by financial leverage and concentrated bets. The warning effectively frames AI investment returns as a financial-stability variable rather than a purely corporate one. "Resilience is not safety," the IMF's Athanasios Vamvakidis said.

Why the Kroger comparison is not proof

Cryptopolitan reported that Kroger plans to cut around 3,000 of its 8,200 corporate jobs—about 37%—over three years. Chief Executive Greg Foran announced the cuts on October 12, weeks after the retailer unveiled its AI strategy, citing streamlining and investment in store staff rather than AI.

The timing of the announcement raises questions, but it does not prove that AI caused the reductions, nor that a broader layoff wave has begun.