Speaking at a panel on the global economic outlook at the ongoing World Economic Forum in Davos, Switzerland, Georgieva said the impact of AI on jobs will be significant.
- She highlighted three takeaways from the IMF’s research on AI’s impact on jobs, with some positive and others concerning.
- The IMF MD added that following the observations at a micro level, one in 10 jobs in advanced economies has already been enhanced by AI.
- This has led to higher incomes for people whose jobs have been enhanced by AI.
Kristalina Georgieva, International Monetary Fund’s Managing Director, on Friday warned that the impact of AI on the labor market will be akin to a tsunami.
Speaking during a panel discussion on global economic outlook at the ongoing World Economic Forum in Davos, Switzerland, Georgieva said that the impact of AI on jobs will be significant. She also highlighted three takeaways from the United Nations agency’s research on the impact of AI on jobs.
While some observations are positive, Georgieva noted that some of them also worry her.
Georgieva’s Three Observations
1. Massive Transformation Of Demand For Skills
Based on the agency’s research, Georgieva stated that they expect AI to affect 60% of the jobs in advanced economies, while the number is pegged at 40% globally. She expects these jobs to either be enhanced, eliminated, or transformed.
“This is like a tsunami hitting the labor market,” she said.
2. What Is Happening With Jobs?
The IMF MD added that following the observations at a micro level, one in 10 jobs in advanced economies has already been enhanced by AI.
This has led to higher incomes for people whose jobs have been enhanced by AI. As a result, they are spending more money, leading to increased demand for low-skill jobs.
However, it’s not all rosy. Georgieva added that tasks that are eliminated because of AI are usually what jobs at the entry-level present. As a result, young people seeking jobs are finding it more difficult to secure a placement.
On the other hand, the jobs that aren’t touched by AI yet are now paying less, she added. “The middle class is inevitably going to be affected,” she said.
Anthropic CEO Dario Amodei said during an interview at Davos this week that he has not changed his previous prediction that AI could eliminate half of white-collar jobs over the next five years.
3. Where Are The Guardrails?
The IMF MD expressed concerns about AI technology advancing rapidly, yet there are no guardrails to make it safe or inclusive.
“My appeal is, wake up. AI is for real, and it is transforming our world faster than we are getting a handle on,” she said.
Bill Gates On AI Disrupting The Labor Market
Earlier this month, Microsoft co-founder Bill Gates warned that AI has gotten good enough already that it is causing a disruption in areas like software development.
While other areas like warehousing or phone support are not as impacted, he warned that once the AIs become more capable, the job disruption will be more immediate.
“AI capabilities will allow us to make far more goods and services with less labor. In a mathematical sense, we should be able to allocate these new capabilities in ways that benefit everyone,” he said.
Gates cautioned that the impact of AI on the job market will only grow over the next five years.
Meanwhile, U.S. equities declined in Friday’s pre-market trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down by 0.02%, and the Invesco QQQ Trust ETF (QQQ) fell 0.12%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘bullish’ territory.
The iShares U.S. Technology ETF (IYW) was flat, while the iShares Expanded Tech Sector ETF (IGM) was down by 0.01% at the time of writing.
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