IMF predicts AI will impact 40% of jobs worldwide, exacerbating inequality and social tensions

A hot potato: The International Monetary Fund (IMF) says that AI is set to affect nearly 40% of all jobs globally, with those in advanced economies more at risk from the technology. The organization also warns that AI could deepen inequality, potentially further stoking social tensions. IMF Managing Director Kristalina Georgieva writes that AI advancements have put the world on the brink of a technological revolution that could increase productivity, raise incomes, and boost global growth.

However, a set of policies is required to ensure AI benefits humanity. IMF staff carried out analysis on the likely impact of AI on the global labor market. As we've seen in plenty of other studies, a huge number of jobs are going to be affected by the technology, almost 40%, and as it is most likely to impact high skilled jobs, advanced economies face the greater risks, with around 60% of jobs impacted in these markets.

The IMF believes that AI will benefit around half of the jobs it impacts in advanced economies, enhancing worker productivity. But the other half could see AI performing key job tasks, leading to lower labor demand, lower wages, and reduced hiring. In some cases, the jobs may be eradicated. Emerging markets such as Brazil look set to face fewer disruptions from AI with around 40% of jobs affected, while the figure for low income nations such as Bangladesh is 26%.

However, many of these countries lack a skilled workforce to harness the benefits of AI, raising the risk of worsening inequality. "In most scenarios, AI will likely worsen overall inequality, a troubling trend that policymakers must proactively address to prevent the technology from further stoking social tensions," Georgieva writes.

There's also a warning about AI causing further polarization within income brackets as those who can harness it could see their productivity and wages increase, while those who cannot might fall behind. Lower income and older workers are said to be more at risk of job displacement than younger employees.

"It is crucial for countries to establish comprehensive social safety nets and offer retraining programmes for vulnerable workers," Georgieva said. "In doing so, we can make the AI transition more inclusive, protecting livelihoods and curbing inequality." The IMF's findings mirror many similar studies on the impact of generative AI in the workplace.

Goldman Sachs believes AI could impact 300 million jobs worldwide, while Analyst firm Forrester thinks it could replace 2.4 million jobs in the US by 2030. Other reports have also highlighted how employment in high income countries is more exposed to AI automation compared to low income nations, with fully remote and clerical workers particularly at risk.

We heard last week that software engineers, a profession previously considered secure and lucrative, are feeling the pressure due to AI and intense competition More studies like these are being released as generative AIs continue to make advancements, though being carried out by the IMF lends this one some extra weight.

It's no wonder Elon Musk believes there will be a time when all human employment will have been eradicated by AI , and that people might only take jobs for personal satisfaction..