A new Federal Reserve Bank of Dallas analysis suggests artificial intelligence may be widening the gap between experienced and entry-level workers rather than triggering mass layoffs. J. Scott Davis found that wages in AI-exposed industries have grown faster than the national average since late 2022, rising 8.5% compared to 7.5% nationwide.

While overall US employment climbed 2.5% during this period, jobs in AI-heavy sectors declined about 1%. Davis argues this points to a shift in how experience is valued rather than simple automation replacing workers. His research shows workers under 25 in AI-exposed industries have experienced employment declines, while experienced workers are seeing larger pay premiums.

The findings challenge apocalyptic predictions about AI's labor market impact. Davis points to a growing divide between "codified" knowledge from textbooks and "tacit" knowledge gained through hands-on work experience. In AI-exposed occupations, returns on job experience are increasing, suggesting young workers with primarily classroom-based knowledge may face tougher job markets.