The International Monetary Fund (IMF) warns that approximately 40% of jobs worldwide could be affected by artificial intelligence (AI), potentially transforming the global workforce through widespread automation, significant changes in job responsibilities, declining demand for certain skills, and the elimination of millions of existing positions.
The IMF is a Washington, D.C.-based UN specialized agency comprising 191 member countries. It promotes global monetary cooperation, financial stability, international trade, sustainable growth, and poverty reduction.
“It is a slow-moving tsunami, but [a] tsunami nonetheless,” managing director Kristalina Georgieva warned on Monday, according to Bloomberg. She added that the technology was already hollowing out demand for routine, repetitive work while adding lower-paid jobs in sectors such as construction, which she called “not a story to celebrate”. Her comments warn of potentially significant changes to the global workforce.
Newer entrants into the workforce, or young workers, may be uniquely susceptible to the effects of AI due to its ability to perform many of the traditional first assignments given to recent college graduates.
“People to worry about, first and foremost, [are] young people that are coming into the labor market,” Georgieva said.
“Normally, they would get into these routine, repetitive jobs and then grow up the ranks. But if they’re gone, I don’t think any young person wants to be a barista in a coffee shop as … professional future.”
Declining rates of full-time employment among university graduates have been noted in Singapore; similarly, studies conducted by PwC and others indicate that AI is affecting what is required of younger employees. However, it is unclear at present how much responsibility lies with AI for these changes versus other economic conditions. Remote work, along with other economic conditions, may play a large part in these developments. Still, the emerging trend warns of potential challenges for young people seeking their first jobs.
Additionally, there is a concern about the potential loss of entry-level tasks that would enable newer employees to build experience, judgment, and leadership skills.
Hence, how can an inexperienced worker gain the necessary experience if no one will give him or her that first opportunity?
While AI may generate new opportunities and/or grow demand for specializations, employers need to think creatively about how they will train/mentor their junior employees.
Organizational responses should include providing AI training for their staff, redesigning entry-level roles, preserving mentoring opportunities within those redesigned roles, and developing leaders early in an employee’s career. Additionally, governments must begin thinking about how automation could impact wage levels and tax revenue. Some economic forecasts warn that failing to prepare could make the transition more difficult.
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In the short term (next 2–3 years), AI presents both significant economic opportunities and risks associated with employment. Ultimately, how AI impacts us will be determined by how businesses, educators, and policymakers navigate this transition for young workers entering the workforce.
But in the long term, the outcome remains uncertain for AI. Some predict AI will eventually wipe out more than half of jobs permanently. And if that happens, a lot of people won’t have the purchasing power to afford the products to keep the other half employed, thus resulting in even more layoffs. So even if you don’t get laid off, you may face a situation where 50, 60, or 70 percent of Americans can’t buy what your employer sells. This possibility warns of a much larger economic problem extending well beyond those who lose their jobs.
For the next 10 to 15 years, the world’s economic system may be very different from what we’re accustomed to.
“Love it, hate it, or fear it. It [AI] is here, and we are already seeing the first wave of impact,” Georgieva said, estimating AI adoption could lift growth by 0.5 percentage point to 1 percentage point in advanced Asia, and 0.2 percentage point to 0.8 percentage point in emerging Asia. At the high end, that “would more than offset the loss that comes from aging population.”
“Predictions give us the wisdom to prepare; warnings give us the chance to change what happens next.”
