AI poses biggest threat to knowledge workers' wages, study finds

While concerns about artificial intelligence displacing human workers have dominated recent discourse, emerging research suggests the technology's impact will be uneven across sectors, with knowledge workers facing disproportionate risk. According to a detailed analysis, cognitive occupations—those requiring advanced learning and problem-solving skills—could experience wage reductions of up to 11.5 per cent under extreme scenarios as AI systems increasingly handle tasks traditionally performed by professionals.

The findings highlight a critical distinction in AI's potential economic impact. Rather than wholesale job elimination across all sectors, the technology appears positioned to compress wages specifically in knowledge-intensive fields where routine analytical and creative tasks can be automated. This contrasts with earlier assumptions that manual and routine work would face the greatest displacement pressure.

The research underscores growing concerns among policymakers and economists about income inequality. While some occupational categories may experience minimal disruption, professionals in finance, law, software development, research, and similar fields could face meaningful wage pressures as AI systems become more sophisticated. The disparity raises questions about how economic gains from AI adoption will be distributed across the workforce.

For India's rapidly expanding knowledge economy and IT services sector, the implications warrant careful consideration. The country's competitive advantage has traditionally rested on a large pool of educated workers willing to perform cognitive tasks at lower costs than developed economies. Any significant wage compression in these sectors could reshape the economic calculus that has driven India's digital transformation and outsourcing growth over the past two decades.