JPMorgan strategist: AI fear is holding wage demands down

David Kelly, chief global strategist at JPMorgan Asset Management, told CNBC that American workers are not negotiating for higher pay because they are scared AI will take their jobs. "They think they're threatened by AI and they don't have the guts, basically, to ask for a wage increase," Kelly said in a segment flagged by Gizmodo. Host Leslie Picker finished the thought on air: "the machine could potentially do your job cheaper. So you better put your head down and keep doing the work."

The numbers around the exchange do most of the work. Unemployment is 4.1%, a level that would historically give workers leverage, yet wage growth sits at 3.1% year over year in August, below the 3.4% inflation rate reported for July, and the slowest pace since May 2021. Kelly noted that less than 6% of private-sector workers are in a union, leaving most without a vehicle to push back when they do try.

Author Matt Novak reads this as the quiet part out loud: the near-term business value of AI, by Kelly's own description, is less about measurable productivity than about what the specter of replacement does to the ask side of the labor market. Two of the analysts in our directory flagged the clip.