IMF Warns of AI's Impact on Labor Market, Calls for Worker Retraining
The International Monetary Fund (IMF) has issued a warning regarding the effects of artificial intelligence (AI) on wages and job opportunities, particularly for entry-level positions and roles vulnerable to automation. The organization noted that the growing demand for AI-related skills has not yet translated into increased employment, unlike other emerging skill sets.
IMF Managing Director Kristalina Georgieva emphasized that policymakers should reform education systems to empower young individuals to leverage AI rather than compete against it. She highlighted that the implications extend beyond economic factors, as work is integral to personal dignity and purpose, making the shift driven by AI critically significant.
The IMF's extensive analysis of millions of job postings and worker profiles across six countries—the United States, the United Kingdom, Germany, Denmark, Brazil, and South Africa—revealed that one in ten job advertisements now demands skills that were not prevalent a decade ago, such as IT competencies and social media management.
While jobs requiring these new skills saw wage increases of 3% to 3.4% in the U.S. and U.K., positions directly related to AI did not contribute to job growth, instead correlating with job losses in sectors most at risk of automation. Over a five-year period, regions with heightened demand for AI skills experienced a 3.6% decline in employment rates compared to other areas.
Georgieva urged governments to enhance support for workers displaced by AI, advocating for retraining initiatives, pathways to new employment, and improved social safety nets. She noted that the highest demand will be for workers who can integrate AI with cognitive, creative, and technical skills, rather than solely focusing on AI development.
This advisory comes in advance of the upcoming annual meeting of global leaders and executives in Davos, Switzerland, as the world grapples with the swift changes that AI is imposing on the labor market.
