AI is a 'slow-moving tsunami' that will wipe out jobs, warns IMF

The International Monetary Fund's Managing Director, Kristalina Georgieva, has expressed deep concern over the "slow-moving tsunami" of artificial intelligence (AI) displacing human workers and altering taxation systems. During her opening remarks at the IMF and World Bank annual meetings in Bangkok on October 12, Georgieva warned that AI is already diminishing the demand for numerous human laborers by automating routine, repetitive tasks. She emphasized that this transformation is a "slow-moving tsunami," albeit not a fictional one.

Georgieva highlighted that while AI is creating low-paying jobs in sectors such as construction, this development should not be viewed positively. The root issue lies in the broader economic consequences, including a shift in public finances. She explained that AI's impact threatens to strain government revenues by skewing the economy towards capital and away from labor, which traditionally generates the majority of tax income.

The IMF chief's remarks come as part of a growing chorus of warnings about the potential disruption AI could cause in the job market and the global economy. Young professionals in industries exposed to AI have already faced reduced hiring rates, putting them at a disadvantage as entry-level job seekers. Furthermore, there is growing concern that AI could exacerbate inequality, as its benefits have been largely concentrated among a select few workers and economies, despite the global investment boom.

Georgieva stressed that while the extent of AI's impact on employment remains uncertain, it is crucial for policymakers to closely monitor the situation and take immediate action to help society adapt to these changes. Despite the challenges posed by AI, she acknowledged that the technology could still contribute positively to growth.

The IMF estimates that the widespread adoption of AI could boost growth by up to one percentage point in advanced Asian economies. Georgieva noted that this growth boost would "more than offset" the negative effects of population aging in rich nations throughout the region.

In conclusion, Georgieva's comments underscore the urgent need for policymakers to reassess education systems and devise strategies to ensure a smooth transition for workers in the face of AI's disruptive effects.