Planet Money Is AI slopifying the job market? (Two Indicators)
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Dec 3, 2025 AI is transforming the job market, leading to fewer entry-level positions and automated recruiters. An economist reveals that AI may lower the labor share by about 5%, raising concerns about concentration and inequality akin to the Industrial Revolution. Intriguingly, candidates prefer AI interviewers, like the AI recruiter Anna, which reduce perceived discrimination and improve interview performance. This shift prompts a rethinking of recruiter roles, moving them to more analytical and valuable tasks in the changing landscape of employment.
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AI Could Shrink Workers' Slice
- AI may shrink the labor share in knowledge work by automating tasks previously done by humans.
- Laura Veldkamp's research predicts about a 5% drop in labor share in financial-sector knowledge work due to AI adoption.
Smaller Slice, Bigger Take-Home
- A smaller labor share can still translate into higher wages if firms become much more profitable.
- Workers with AI skills in finance earn roughly $22,000 more annually, per Veldkamp's findings.
Early Adopters May Hoard AI Gains
- Early AI adopters risk gaining concentrated market power and capturing most of the gains.
- The Industrial Revolution's monopolists warn that AI could create dominant firms that squeeze workers and consumers.