IMF warns AI to hit almost 40% of global employment, worsen inequality

IMF warns AI to hit almost 40% of global employment, worsen inequality

IMF warns AI to hit almost 40% of global employment, worsen inequality

A pedestrian walks past the TATA pop up store with a poster reading ‘The Future is AI’ ahead of the World Economic Forum (WEF) in Davos, Switzerland, on Sunday, Jan. 14, 2024. The annual Davos gathering of political leaders, top executives and celebrities runs from January 15 to 19. Photographer: Hollie Adams/Bloomberg via Getty Images

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The International Monetary Fund warned that nearly 40% of jobs across the globe could be affected by the rise of artificial intelligence, with high-income economies facing greater risks than emerging markets and low-income countries.

The Washington, D.C.-based institution on Sunday assessed the potential impact of AI on the global labor market and found that, in most cases, the technology is likely to worsen overall inequality.

IMF chief Kristalina Georgieva urged policymakers to tackle this “troubling trend” and to proactively take steps “to prevent the technology from further stoking social tensions.”

“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,” Georgieva said.

The IMF noted that about 60% of jobs could be impacted by AI in high-income nations, and roughly half of these may benefit from AI integration to boost productivity.

Comparatively, AI exposure was estimated to come in at 40% in emerging markets and at 26% in low-income countries, respectively.

The findings suggest that emerging markets and low-income countries face fewer disruptions from AI in the short-term. The IMF notes that many of these nations don’t have the infrastructure of skilled workers to harness the immediate benefits of AI, raising the risk that the tech could worsen inequality.

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The IMF also flagged that AI could affect income and wealth inequality within countries, warning of “polarization within income brackets.”

It said workers who are able to access the benefits of AI could increase their productivity and salary, while those who cannot are at risk of falling further behind.

Goldman Sachs has previously warned generative AI could impact as many as 300 million jobs worldwide, although the Wall Street bank acknowledged the technology could spur labor productivity and growth and boost gross domestic product by as much as 7%.

The IMF report comes as business and political leaders from around the world gather at the World Economic Forum in Davos, Switzerland. The annual WEF meeting, which runs through to Friday, takes place under the theme of “Rebuilding Trust.”

WEF says the Davos program embodies a “back to basics” spirit of open and constructive dialogue between policymakers, business leaders and civil society, with the benefits and drawbacks of AI expected to be a key topic of discussion. The event has been criticized in recent years for being out of touchineffective and irrelevant.

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