German companies expect wages to fall as AI spreads

Many companies in Germany expect wages to fall over the next five years as artificial intelligence becomes more widely used, according to a June 2026 business survey by the Ifo Institute in Munich that polled more than 3,000 firms already using AI.

Employees with less than five years of professional experience appear most at risk: around half of the companies that already deploy AI expect wages for that group to decrease. Among workers with at least five years' experience, roughly 40% of firms predict wage declines.

Sector and qualification gaps

Firms in the service sectors expect pay cuts linked to AI adoption. In trade, 47.9% and 41.3% of companies foresee reductions, while in industry the shares are 46.5% and 38.9% (the first figure in each pair refers to employees with under five years' experience, the second to those with five or more years).

Construction companies are less likely to anticipate AI-driven wage drops: 39% for lower-experience workers and 31.3% for those with more experience. These construction figures relate to employees without higher education.

Expectations differ by qualification. Forecasts for workers with higher education remain almost unchanged overall, and that group is more likely than others to see pay rises: 26% of companies say AI will have a positive effect on wages for highly educated staff. Even among highly educated workers with little experience, 16.3% of companies expect pay increases; by contrast, only 5.9% of companies predict wage rises for low-qualified workers with little experience.

The analysis is based on the Ifo business survey for June 2026, which covered more than 3,000 German companies that already use artificial intelligence.

More than 64 billion euros were lost in Germany due to non-compliance with the minimum wage.

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