IMF Warns AI Could Impact 40% of Global Jobs, Deepen Inequality

Featured & Cover IMF Warns AI Could Impact 40% of Global Jobs Deepen Inequality

The International Monetary Fund (IMF) has issued a stark warning about the impact of artificial intelligence (AI) on the global labor market, suggesting that nearly 40% of jobs worldwide could be affected. The institution, based in Washington, D.C., highlighted that high-income economies are at a higher risk compared to emerging markets and low-income countries.

The IMF’s analysis, released on Sunday, emphasized that AI is likely to exacerbate overall inequality in most scenarios. Kristalina Georgieva, the IMF chief, called on policymakers to address this “troubling trend” and to take proactive measures to “prevent the technology from further stoking social tensions.”

Georgieva elaborated on the dual potential of AI, stating, “We are on the brink of a technological revolution that could jumpstart productivity, boost global growth and raise incomes around the world. Yet it could also replace jobs and deepen inequality.”

According to the IMF, approximately 60% of jobs in high-income countries could be impacted by AI, with around half of these jobs potentially benefiting from AI integration through enhanced productivity. In contrast, the exposure to AI in emerging markets is estimated at 40%, and in low-income countries, it is around 26%.

The IMF’s findings indicate that emerging markets and low-income countries might experience fewer disruptions from AI in the short term. However, these nations often lack the skilled workforce and infrastructure necessary to immediately capitalize on AI’s benefits, which could lead to increased inequality.

The IMF also cautioned that AI could deepen income and wealth disparities within countries, warning of potential “polarization within income brackets.” Workers who can leverage AI to boost their productivity and earnings are likely to see significant benefits, while those unable to adapt may fall further behind.

In a related warning, Goldman Sachs previously projected that generative AI could affect up to 300 million jobs globally. Despite this, the investment bank acknowledged that AI has the potential to enhance labor productivity, spur economic growth, and increase gross domestic product (GDP) by as much as 7%.

The release of the IMF’s report coincides with the annual World Economic Forum (WEF) meeting in Davos, Switzerland, where global business and political leaders are gathered. This year’s WEF meeting, which runs through to Friday, is centered on the theme of “Rebuilding Trust.” The Davos program is described by WEF as embodying a “back to basics” spirit, promoting open and constructive dialogue among policymakers, business leaders, and civil society. The benefits and drawbacks of AI are expected to be a significant topic of discussion.

Despite its prestigious history, the WEF has faced criticism in recent years for being perceived as out of touch, ineffective, and irrelevant. This year’s focus on AI, in the context of rebuilding trust, underscores the importance of addressing both the opportunities and challenges posed by rapid technological advancements.

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