Corporate America is leaning hard into “do more with less.” That’s lifting output while keeping hiring muted, a shift that explains why the economy can post a strong 4.3% GDP print while unemployment sits at 4.6%. Business Insider reported that AI investment drove growth, even as many large firms associated with that spending have also led white-collar cuts. The result is a labor market that feels tighter for job seekers than the topline macro data suggests.
The wage outlook for 2026 is consistent with that dynamic. Investopedia cited a Payscale survey in which employers plan raises averaging 3.3% in 2026, down 0.1 percentage point from 2025, while wage growth in job postings has cooled. It also flagged a drop in wage growth from 3.4% annualized in January to 2.5% in September, as employers avoid hiring sprees but also sidestep mass layoffs amid tariff and demand uncertainty.
This is where the catalyst matters. If AI projects start producing clear returns, firms can increase output without adding staff, which supports margins but risks extending the “jobless boom.” If AI expectations disappoint, the risk shifts from labor to markets. Mark Zandi explicitly raised that two-sided risk, warning that AI could either drive productivity-led job losses or spark a correction if investors are overestimating AI’s payoff. That’s a sharp contrast from the post-pandemic period when demand for workers forced employers to compete on pay.
What to do with this as a reader and investor is straightforward. Treat 2026 as an “efficiency economy” until proven otherwise. That means watching labor-market re-acceleration signals, but also recognizing that the near-term winners are likely firms that can translate AI capex into measurable productivity. If you’re planning budgets, compensation, or hiring, assume raises near the 3% range and longer time-to-hire. If you’re investing, focus on who captures the productivity dividend, because workers may not see it quickly.
