AI’s Impending Impact on the Labor Market: A Forewarning from the IMF
Kristalina Georgieva, the head of the International Monetary Fund (IMF), firmly asserted that artificial intelligence is poised to inundate the labor market.
During her address at the World Economic Forum in Davos, she emphasized that younger generations would be disproportionately affected by this technological upheaval.
In her remarks, Georgieva referenced findings from the IMF’s recent research, indicating a significant transformation in the demand for skills as AI becomes increasingly ubiquitous.
“We anticipate that in advanced economies, approximately 60% of jobs will be influenced by AI—whether enhanced, displaced, or transformed—in the coming years, with a global figure of around 40%,” she stated. “This phenomenon resembles a tsunami overwhelming the labor market.”
According to Georgieva, AI has already augmented roughly 10% of jobs in advanced economies, leading to increased wages for those workers and fostering positive repercussions for local economies.
Conversely, she cautioned that AI’s proliferation could obliterate many roles typically occupied by entry-level employees.
“The tasks being eradicated predominantly correspond to those undertaken by young individuals currently entering the workforce, thereby complicating their pursuit of promising career opportunities,” she elaborated.
Additionally, Georgieva noted that individuals in positions largely unaffected by AI could still face financial pressures, with their incomes potentially declining in the absence of productivity gains stemming from the technology. “Inevitably, the middle class will experience ramifications,” she predicted.
Her profound concern lies in the regulation of AI technologies. “The pace of advancement is staggering; however, we lack clarity on how to ensure safety and inclusivity. Wake up—AI is an undeniable force, rapidly reshaping our world faster than we can adapt,” she cautioned.
This year’s gathering of global business and political leaders at the Swiss ski resort has been overshadowed by Donald Trump’s fluctuating tariff proposals concerning Greenland’s future. Nonetheless, numerous delegates have actively sought to illuminate both the opportunities and dangers presented by AI.
Christy Hoffman, general secretary of the UNI global union, articulated a poignant observation: “Essentially, the primary objective of AI from a business perspective is to enhance productivity, consequently driving down costs—this often translates into job reductions.”
“Confronting the ensuing disruption—and strategizing how to manage it—is imperative,” she asserted, advocating for a fair distribution of productivity benefits throughout the economic landscape.
“We aim to partake in the profits. Our goal is not to halt AI, nor do we intend to—I merely wish for it not to subdue us,” she added, advocating for employers to engage workers and their representatives in discussions regarding the integration of AI tools prior to their implementation.
Earlier in the gathering, Microsoft CEO Satya Nadella expressed concerns that AI might risk losing its “social license” to compete for vital resources, such as energy, if it fails to deliver advantages beyond the reach of a select few tech companies, like the swift advancement of effective pharmaceuticals.
Georgieva shared the panel with Christine Lagarde, president of the European Central Bank, who warned of potential setbacks in the AI revolution due to escalating mistrust among competing economies, particularly as the United States erects tariff walls.
“We are interdependent,” she asserted, emphasizing that AI is capital, energy, and data intensive. Without cooperative efforts to “establish new rules of engagement,” she warned, there will be diminished capital and reduced data availability. “We find ourselves in a challenging predicament, let’s be honest,” she stated.
Lagarde also highlighted concerns regarding the widening chasms of global inequality, remarking on the “growing and deepening disparities.”
Earlier, Canadian Prime Minister Mark Carney urged attendees to confront a lasting “rupture” in the global economic landscape and unite against unpredictable US trade policies.
However, Lagarde expressed a more optimistic view, stating, “I do not entirely align with Mark’s perspective. I believe discourse should focus on alternatives, rather than rupture.”
Source link: Theguardian.com.
