Apollo’s Slok Says AI Weighs On Pay Without Cutting Jobs — Yet

Torsten Slok found something surprising when Apollo Global Management Inc. looked at how the adoption of artificial intelligence was playing out in the labor market.

Despite years of warnings about mass job displacement, the fallout from AI in terms of employment is actually “insignificant,” said Slok, Apollo’s chief economist. Rather, the AI effect is showing up in weaker wage growth, he said in an interview with Bloomberg’s Wall Street Week with David Westin.

The analysis by Slok and co-author Sania Edlich adds another data point to the emerging debate over how the technology will reshape the labor market. It runs counter to some other evidence, including a recent Bureau of Labor Statistics report that a group of 18 occupations with AI exposure — covering about 10 million positions — saw a 0.2% drop in jobs as of May 2025 from a year earlier. Payrolls overall rose by 0.8%. Goldman Sachs Group Inc. economists said in May that fields “highly exposed to AI substitution” saw a faster drop job openings than others.

To gauge AI’s impact, Edlich and Slok reviewed roughly 300 occupations broken into high- and low-AI-exposure groups and compared how they fared before and after the arrival of ChatGPT, whose ease of use triggered a stampede into AI across corporate America. The study found that wages of workers with high AI exposure grew 6.7% more slowly than those in low-exposure occupations, and the effect was more pronounced among lower-income groups. Slok also said that AI has accelerated the rate of business formation, which is now the highest on record.

“So far the dominating effect has been that there is also a much more dynamic economy where people can now invent ideas, use agents, use loops, graphs to come up with ideas and as a result, create more businesses,” Slok said.

US startups historically demonstrate greater staying power than their European counterparts, generating stronger wage growth as a result.

Diane Gherson, former chief human resources officer at International Business Machines Corp., suggested that AI-related cuts may be masked by other factors. Some companies are quietly reducing headcount in high-attrition, lower-wage roles such as customer service by simply hiring fewer people rather than conducting visible layoffs, Gherson said on Wall Street Week.

A structural distortion in corporate accounting is accelerating the trend, according to Gherson, who is now a senior adviser at Boston Consulting Group. Severance costs from layoffs can be taken as a one-time restructuring charge that investors discount, while spending on retraining employees hits the profit-and-loss statement as recurring operating expenses every quarter, making workforce cuts financially more attractive on paper.

There are counter-examples, she added. Among them: the furniture retailer Ikea, where 500 customer service agents were retrained as remote interior design consultants after more than half of their work was automated by AI. They generated more than $1.8 billion in new revenue, she said. Meanwhile, radiologists are now working significantly faster with AI assistance while spending more time with patients, she added.

Slok acknowledged that the productivity payoff remains unproven at scale, pointing out that margins for S&P 500 companies outside the Magnificent Seven have not yet risen, though he expects improvement over coming quarters.

Policymakers face significant uncertainty, Slok added: If automation drives unemployment toward 10% or 15%, stimulus and displacement support will be needed. But if business creation dominates, the greater risk is an overheating economy — leaving Washington with little choice for now but to wait and see which scenario prevails.

(This story was produced with the assistance of Bloomberg Automation.)