AI Predicted by IMF to Lower Labor Demand, Worsen Inequality

As artificial intelligence (AI) continues to boom across different industries, the International Monetary Fund (IMF) expects its effects may result in a lower demand for labor and worsen inequality between different countries of different economies, BBC reports.

These predictions come after the IMF released a blog post authored by the organization's managing director Kristalina Georgieva, stating that almost 40% of jobs will be impacted by AI, both for better and for worse of humanity.

The attached analysis states that AI is expected to worsen inequality between countries simply because advanced economies are more exposed to the advantages and disadvantages of AI sooner compared to rising markets and developing countries. The reason for such is because of advanced economies' employment structures are centered on professions requiring a lot of cognitive processing.

BBC adds that AI is also reportedly able to carry out important jobs that people presently do. This may result in a decrease in the need for labor, which would have an impact on salaries or possibly lead to the elimination of employment.

Economy-Related AI Advantages

As per the IMF blog post, AI may have an influence on around 60% of occupations in developed nations. The productivity of around half of the exposed occupations might be increased by integrating AI. Half of the workforce on the other hand, may see a reduction in labor demand, which would result in lower earnings and fewer jobs being hired, as AI programs take over critical functions presently completed by people. In the worst circumstances, several of these positions may vanish.

In contrast, it is anticipated that AI exposure will be 40% in developing economies and 26% in low-income nations. These results imply that poor and emerging market economies would see less direct disruptions from AI. However, a lot of these nations lack the infrastructure and trained labor to fully utilize AI, which increases the technology's danger.

Aside from establishing which economies are well suited to weather the AI storm, the analysis also states that college-educated workers are better suited amidst this technological revolution.

AI Boom Against Different Generations

Workers who are older, on the other hand, may be more susceptible to the AI-driven revolution. In the UK and Brazil, for instance, the analysis states that college-educated persons traditionally migrated more readily from professions currently deemed to have high displacement potential to ones with high complementarity.

Workers without a college degree, however, have less mobility. Younger people may also be more equipped to take advantage of the new chances if they are flexible and knowledgeable about new technology. However, elderly workers could find it difficult in finding new work, readjusting to technology, moving around, and receiving training for new technological competencies.

As for which specific jobs are highly impacted by AI, a report from May of last year by Forbes states that employment in the information processing industries, such as IT, are most susceptible to generative AI, whereas jobs in the manufacturing, mining, and agriculture sectors are least exposed. This is because professions that need "programming and writing skills" directly link more to GPT's capabilities.