Early data show wages are rising for AI-exposed jobs that place a high value on a “worker's tacit knowledge and experience”, as textbook knowledge loses value
Artificial intelligence's impact on the labor market will depend on whether the technology automates or augments worker tasks.
Context & Ripple Effects
The labor-market debate has centered on whether AI substitutes for workers or raises their output. This evidence adds a distributional distinction: work grounded in accumulated, hard-to-codify experience may be gaining relative value even within AI-exposed occupations.
It also sits uneasily beside later evidence that employment for young workers in highly AI-exposed occupations has been shrinking. That contrast suggests wage gains for experienced workers and access to entry-level roles can move in different directions.
First-order effects
- Workers in AI-exposed roles where tacit knowledge and experience matter are seeing early wage gains, strengthening their bargaining position relative to workers whose value rests more on explicit, textbook knowledge.
- Employers using AI in these roles have a clearer incentive to retain and recruit experienced staff who can apply judgment beyond what the tools readily encode.
Second-order effects
- Hiring and training may shift toward demonstrated experience and task-specific judgment, while junior roles built around codified knowledge face greater pressure; the later decline in employment among 22-to-25-year-olds in highly exposed jobs is consistent with that risk.
- Companies may capture more value by pairing AI with experienced operators rather than treating it as a standalone headcount-reduction tool, increasing demand for workflows that augment expert judgment.
Third-order effects
- If the pattern persists, AI could widen pay and opportunity gaps within occupations: experience-rich workers gain leverage while traditional routes for converting formal education into early-career experience weaken.
- The key labor-market question becomes whether employers and institutions create new pathways for workers to acquire tacit knowledge, rather than assuming AI productivity gains translate evenly into employment growth; economists have likewise differed on whether productivity gains will produce more jobs.
The trend: AI is shifting labor demand from readily codified knowledge toward complementary human judgment, experience, and the ability to apply both in real-world workflows.