AI will affect 40 per cent of all jobs, likely to worsen overall inequality, warns IMF chief

Artificial intelligence is poised to impact nearly 40 per cent of jobs globally, with advanced economies at a higher risk compared to emerging markets and low-income countries, according to an analysis by the International Monetary Fund. Managing Director Kristalina Georgieva, in a blog post discussing the study, noted that in most scenarios, AI is likely to exacerbate overall inequality, emphasizing the need for proactive policymaking to prevent the technology from intensifying social tensions. The income inequality effect of AI is expected to hinge on how much the technology complements high earners. Increased productivity from high-income individuals and companies could lead to a wider wealth gap, Georgieva explained. To address these challenges, countries are urged to implement “comprehensive social safety nets” and retraining programs for workers vulnerable to AI-related job displacement. While AI has the potential to replace certain jobs entirely, the IMF analysis suggests that the more probable scenario is AI complementing human work. Advanced economies are anticipated to see around 60 per cent of jobs affected, a higher proportion compared to emerging and low-income countries. Georgieva’s perspective on AI aligns with discussions at the World Economic Forum in Davos, Switzerland, where global business and political leaders are convening. The proliferation of AI in companies has raised concerns among employees about the future of their roles, exemplified by cases like Buzzfeed Inc., which announced plans to use AI for content creation, resulting in the closure of its core news department and layoffs. In terms of regulatory responses, the European Union reached a tentative deal in December on legislation outlining safeguards for AI, while the United States continues to deliberate on its federal regulatory approach to AI. As AI continues to reshape the job market, the IMF’s analysis underscores the importance of proactive policies to mitigate inequality and provide support for workers impacted by technological advancements. (With inputs from agencies)