One in five workers find AI worsens their job, a new report reveals, as the Institute for Public Policy Research (IPPR) warns that without urgent intervention, the technology risks degrading working conditions and displacing millions of employees. The TUC-backed study paints a stark picture: while 20% of workers say artificial intelligence is making their working life better, 21% report the opposite, and 4% believe they have already lost a job because of AI. The IPPR argues that the current trajectory, left unchecked, will see “degradation become the default outcome” for a significant portion of the workforce.
AI’s negative impact on workers
The report categorises AI’s possible effects into three types: augmentation, where it complements human labour; degradation, where it undermines work experience through intensified monitoring or management; and displacement, where it replaces workers entirely. Evidence suggests the latter two are already materialising. A study from King’s College London found that firms with high exposure to AI reduced total employment by 4.5%, with the impact concentrated on junior positions, and were less likely to post new vacancies. Morgan Stanley research indicates that British companies are reporting net job losses due to AI over the past twelve months, a rate higher than in other leading economies. The IPPR itself estimates that up to eight million jobs could be at risk if the government fails to implement an industrial strategy for AI, with low-skilled, back-office, entry-level and part-time roles most exposed. Women and young people are identified as the groups most likely to be affected.
Worker anxiety is running high. Polling cited by the TUC shows that 62% of 25- to 34-year-olds are concerned about AI’s impact on their jobs, and more than a quarter of all UK workers (27%) fear their job could disappear within five years because of the technology. Gen Z workers are the most worried. “The question is not whether AI will disrupt working life, but who will have the power to shape that disruption – and whose interests it will ultimately serve,” the IPPR authors argue.
Proposals to strengthen worker bargaining power
The IPPR’s central prescription is a package of measures designed to boost employees’ influence at what it calls “a pivotal moment in the history of work.” The thinktank is calling for a statutory duty on employers to consult workers before adopting AI systems that could significantly affect jobs or working conditions. This consultation could take place through existing collective bargaining arrangements with trade unions, through worker representation on company boards, or via a new dedicated consultative body. The aim is to ensure that workers have a meaningful say in how AI is deployed, rather than being presented with a fait accompli.
A second key proposal is a “worker support levy” – a fund that could be financed either by companies or by workers themselves – to create a portable “wallet” of benefits that individuals can carry from job to job. This wallet could cover union membership, insurance or training costs, with the broad objective of increasing workers’ bargaining power by reducing their dependence on any single employer. The report argues that such portable entitlements would help redress the power imbalance between employers deploying AI and the employees affected by it.
The TUC, which wrote a foreword to the report, has long advocated for a “worker first” approach to AI. General Secretary Paul Nowak draws a historical parallel: “The Industrial Revolution – often casually invoked to describe the possibilities of AI – saw 50 years of wage stagnation while profits soared. It took the difficult birth of the labour movement to tip technological gains towards workers’ interests and broader social wellbeing.” The TUC has been running a four-year project on AI in the employment relationship, maintains an AI working group, and has published a draft model AI Bill to improve workers’ rights. It also proposes attaching conditions to public AI research and development funding to support workers, ensuring a “digital dividend” from productivity gains, and attaching “good work” strings to private sector tech involvement in public services.
Government’s view and the cost of reform
The government has made clear it is enthusiastic about the adoption of AI. Chancellor Rachel Reeves has identified it as one of three drivers of stronger economic growth – alongside closer EU relations and more regional devolution – and in her Mais lecture called AI “the defining technology of our era,” saying she was determined to “maximise the value added … to the wider economy and the public sector through accelerated adoption.” The UK aims to achieve the fastest AI adoption in the G7, backed by a £500 million sovereign AI fund and a £1 billion programme for quantum computers. An AI Economics Institute has been established to improve understanding of AI’s impact on jobs and productivity, and the government’s National AI Strategy positions the UK as a “science and AI superpower.”
On regulation, the UK has adopted a “pro-innovation, context-specific” approach, largely relying on existing sector-specific regulators rather than a single AI law, though a Frontier AI Bill has been proposed to give the AI Safety Institute statutory powers to test advanced models before market release.
Since coming to power in July 2024, Labour has introduced what it calls the biggest upgrade to workers’ rights in a generation. Its New Deal for Working People includes banning exploitative zero-hours contracts, ending “fire and rehire” practices, making flexible working the default, introducing day-one rights for unfair dismissal, parental leave and sick pay, and strengthening protections against sexual harassment. The TUC-backed IPPR report sits within this reform agenda, but business groups have warned that alongside tax rises and chunky increases in the national living wage, the new employment laws have pushed up the cost of employing staff. Full-time staff costs have risen by 9.6% over the past year, and the British Chambers of Commerce notes that rising costs are having an adverse impact on the jobs market, with fewer businesses taking on new staff and unemployment at a four-year high – disproportionately affecting young people. Nearly one in five small businesses say the new laws significantly discourage them from hiring. Business leaders express concern that good businesses may delay investment or remain smaller than desired because of the perceived difficulty and cost of employment, even as productivity gains from AI are reported – an 11.5% increase in one study – yet without corresponding job creation seen in other economies.
