IMF warns AI to hit 40% of jobs and worsen inequality

January 22, 2024

Artificial intelligence is set to affect nearly 40% of all jobs, according to a new analysis by the International Monetary Fund (IMF).

IMF’s managing director Kristalina Georgieva has said that, in most scenarios, AI will likely worsen overall inequality.

Ms. Georgieva added that policymakers should address the “troubling trend” to “prevent the technology from further stoking social tensions.”

The proliferation of AI has put its benefits and risks under the spotlight.

The IMF said AI is likely to affect a greater proportion of jobs, put at around 60%, in advanced economies. In half of these instances, workers can expect to benefit from the integration of AI, which will enhance their productivity.

In other instances, AI will have the ability to perform key tasks that are currently executed by humans. This could lower demand for labour, affecting wages and even eradicating jobs.

Meanwhile, the IMF projects that the technology will affect just 26% of jobs in low-income countries.

It echoes a report from Goldman Sachs in 2023, which estimated AI could replace the equivalent of 300 million full-time jobs but said there may also be new jobs alongside a boom in productivity.

More generally, higher-income and younger workers may see a disproportionate increase in their wages after adopting AI.

Lower-income and older workers could fall behind, the IMF believes.

AI technology is facing increased regulation around the world. Last month, European Union officials reached a provisional deal on the world’s first comprehensive laws to regulate the use of AI.

The European Parliament will vote on the AI Act proposals early this year, but any legislation will not take effect until at least 2025.

The U.S., UK, and China have yet to publish their own AI guidelines.

This is valid as of 22nd January 2024.

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