AI's Impact on Jobs: Global Inequality and the Urgency for Inclusive Policies

15.01.2024 posted by Admin

AI Impact on Jobs and Urgent Policy Measures

A recent study conducted by the International Monetary Fund (IMF) predicts that artificial intelligence (AI) is on track to impact almost 40% of the workforce. IMF's managing director, Kristalina Georgieva, asserts that in most scenarios, AI is likely to exacerbate overall inequality, emphasizing the need for policymakers to address this concerning trend to prevent further social tensions arising from technological advancements.

The analysis indicates that in advanced economies, approximately 60% of jobs may be affected by AI, with about half of these instances resulting in improved productivity for workers. However, in some cases, AI may take over tasks currently performed by humans, potentially reducing the demand for labor, impacting wages, and potentially leading to job loss.

Contrary to the situation in wealthier nations, the IMF projects that only 26% of jobs in low-income countries will be affected by AI. This aligns with a 2023 report from Goldman Sachs, estimating that AI could replace the equivalent of 300 million full-time jobs, yet also suggesting the possibility of new jobs emerging alongside increased productivity.

In November, UK Prime Minister Rishi Sunak downplayed concerns about AI's impact on jobs, asserting that educational reforms would enhance skills and mitigate potential job displacement. However, Georgieva points out that many countries lack the necessary infrastructure and skilled workforce to harness AI's benefits, potentially exacerbating global inequality.

The IMF suggests that higher-income and younger workers may experience a disproportionate increase in wages with AI adoption, while lower-income and older workers could face challenges. Georgieva emphasizes the importance of countries establishing comprehensive social safety nets and retraining programs to make the AI transition more inclusive, protecting livelihoods and reducing inequality.

This IMF analysis coincides with discussions on AI at the World Economic Forum in Davos, Switzerland. The technology's increasing prominence has led to global regulatory efforts, with European Union officials recently reaching a provisional deal on comprehensive laws to regulate AI use. However, the implementation of such legislation is not expected until at least 2025, while the US, UK, and China have yet to release their own AI guidelines.
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