The head of the International Monetary Fund has warned that artificial intelligence (AI) will be a “tsunami hitting the labour market”, with young people set to be the worst affected. Kristalina Georgieva told delegates at the World Economic Forum in Davos that the IMF’s research suggests 60% of jobs in advanced economies will be affected by AI over the coming years, with many entry-level roles being eliminated.
Georgieva said that in advanced economies, one in ten jobs has already been “enhanced” by AI, leading to higher pay for those workers and knock-on benefits for the local economy. However, she warned that AI will wipe out many roles traditionally taken up by younger workers. “Tasks that are eliminated are usually what entry-level jobs do at present, so young people searching for jobs find it harder to get to a good placement,” she explained.
The IMF chief also warned that the middle class is “inevitably” going to be affected, with the risk of their pay potentially falling without a productivity boost from AI. Georgieva said her greatest fear is that AI is not being sufficiently regulated. “This is moving so fast, and yet we don’t know how to make it safe. We don’t know how to make it inclusive. Wake up, AI is for real, and it is transforming our world faster than we are getting ahead of it,” she said.
Georgieva’s comments were echoed by Christy Hoffman, general secretary of the UNI global union, who told the Guardian that the point of AI from a business perspective is to increase productivity and lower costs – “which will be cutting jobs”. Hoffman called for the productivity benefits of AI to be distributed fairly across the economy, saying “We want to share in the gains. We’re not going to stop AI, nor do we want to even try – but we don’t want it to just roll over us.”
The warnings about the disruptive impact of AI come as policymakers and business leaders grapple with the wider implications of the technology. Christine Lagarde, president of the European Central Bank, warned that the AI boom could be hampered by growing mistrust between rival economies, as the US throws up trade barriers. “We are dependent on each other,” she said, pointing out that AI is capital intensive, energy intensive and data intensive.
Lagarde also sounded the alarm about widening global inequality, highlighting the “disparity that is getting deeper and bigger”. Her comments echo those of Canadian Prime Minister Mark Carney, who earlier in the week urged delegates to face up to a permanent “rupture” in the global economic order.
While the challenges posed by AI are clear, Lagarde struck a more optimistic note, saying “I’m not sure that we should be talking about rupture. I think we should be talking about alternatives.” As policymakers and business leaders grapple with the workforce disruption ahead, finding the right balance between the benefits and risks of AI will be crucial.
