European Employment Sector Facing Transformation: Advocacy for a Societal Agreement
In the rapidly evolving world of artificial intelligence (AI), the European Union is taking decisive action to address the impact of AI on employment, income, and social cohesion.
A recent report estimates that the Recovery and Resilience Facility could generate economic spillovers amounting to €345.5 billion, accounting for about 40 percent of its total impact. However, the EU's current policy approach to AI is ill-equipped to anticipate significant disruption to the labor market.
To address this challenge, the European Union is being called upon to establish a European "AI Social Compact," tied to the European Social Fund, to align technological progress with labour protections and targeted upskilling. This compact would focus on transparency, safety, accountability, workforce AI literacy, and coordinated regulatory and research efforts to mitigate job displacement due to AI adoption.
While the exact term "European AI Social Compact" is not specifically detailed in the search results, relevant elements can be synthesized from the EU’s AI regulatory framework, strategic initiatives, and policy outlook.
Mandatory AI literacy for employees, introduced under the EU AI Act implementation since February 2025, is one such measure. The phased regulatory approach to AI systems, categorized by risk levels, and the General-Purpose AI (GPAI) Code of Practice, voluntarily adopted by the EU, also contribute to this compact. These frameworks aim to shape how AI can be deployed in the workplace, ensuring transparency, safety, and accountability.
The EU's broader approach includes significant investment in AI research and safety, creation of dedicated bodies, and planned international coordination to promote shared responsibility for AI deployment effects, including workforce impacts. The strategic recognition of the need to balance ethical AI regulation with innovation and social cohesion is another key aspect of this approach.
Strategic investments in AI infrastructure and foundational research are considered essential for the EU's competitiveness. However, the Commission's approach to the Multiannual Financial Framework for 2028 to 2034 does not call for a meaningful increase in the Union's financial capacity, which could hinder the implementation of the proposed European AI Social Compact.
A European AI Social Compact, anchored in the next Multiannual Financial Framework, is urgently needed to protect workers, support regions, and ensure that no one is left behind in the age of artificial intelligence. The objective of this compact should be to ensure that the benefits of AI reach citizens across the income distribution and throughout all 27 Member States.
The adoption of generative AI has dramatically accelerated the pace and scale of automation, with warnings from industry leaders like Dario Amodei, CEO of Anthropic, that generative AI models could eliminate up to half of all entry-level white-collar jobs and push unemployment up by 10 to 15 percent within one to five years. Without strong EU-level instruments to guide social investment, support job transitions, and ensure inclusive AI adoption, the transformation will be more disruptive, and its costs more unevenly distributed.
Reskilling efforts should promote the development of "hybrid intelligence" - broader competencies that are more resilient to future disruptions caused by AI. This compact would provide a comprehensive social protection scheme for workers affected by AI-driven changes in the labor market, ensuring that the benefits of AI are equitably distributed across society.
As the European Union navigates the challenges and opportunities presented by AI, the proposed European AI Social Compact offers a proactive strategy to manage AI's socioeconomic effects on employment and societal stability. The compact represents a significant step towards ensuring that the EU remains at the forefront of AI innovation while protecting its citizens and promoting social cohesion.
[1] EU AI Act: https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12529-AI-Act-Regulation-on-Artificial-Intelligence-and-Amended-Audiovisual-Media-Services-Regulation [2] GPAI Code of Practice: https://gpaicouncil.ai/code-of-practice/ [3] GPAI Council: https://gpaicouncil.ai/ [4] EU AI Act Proposal: https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12529-AI-Act-Regulation-on-Artificial-Intelligence-and-Amended-Audiovisual-Media-Services-Regulation [5] European Commission AI strategy: https://ec.europa.eu/info/strategy/priorities-2019-2024/europe-fit-digital-age/artificial-intelligence_en
- To combat the disruption of AI on the labor market, the European Union is urged to establish a European "AI Social Compact," aligning technological progress with labour protections and targeted upskilling, focusing on transparency, safety, accountability, workforce AI literacy, and coordinated regulatory and research efforts.
- The EU's proposed European AI Social Compact aims to ensure that the benefits of AI reach citizens across the income distribution and throughout all 27 Member States, including measures like mandatory AI literacy for employees and a comprehensive social protection scheme for workers affected by AI-driven changes in the labor market.
- In the context of the European Union's AI regulatory framework, strategic initiatives, and policy outlook, the European AI Social Compact would help shape how AI can be deployed in the workplace, ensuring transparency, safety, and accountability, and addressing the challenge of significant disruption to the labor market.
- The European AI Social Compact, anchored in the next Multiannual Financial Framework, is crucial for the EU to protect workers, support regions, and ensure equitable distribution of the benefits of AI, as the adoption of generative AI has the potential to eliminate up to half of all entry-level white-collar jobs and push unemployment up by 10 to 15 percent within one to five years.
