IMF Raises Alarm Over AI-Induced Labor Disruptions and Rising Inequality
The International Monetary Fund (IMF) has expressed “profound concerns” regarding the massive labor disruptions and escalating inequality that AI could bring. In a report released this week, the IMF urged governments to take proactive measures to safeguard their economies.
The report highlighted the need for countries to enhance unemployment insurance, warning that AI could potentially lead to the loss of higher-skilled jobs, unlike previous disruptive technologies. While generative AI holds significant potential for boosting productivity and enhancing public service delivery, the IMF emphasized that it also “raises profound concerns about massive labor disruptions and rising inequality.”
Generative AI, which involves computers autonomously creating text or images using generative models, gained widespread attention with the launch of OpenAI’s ChatGPT in 2022. Despite the slow adoption by many companies, generative AI has sparked a resurgence in global tech stocks.
The IMF report underscored the necessity for education and training policies to adapt to the new realities of the job market. Emphasizing life-long learning, the report called for sector-based training, apprenticeships, and reskilling schemes to facilitate workers’ transition to new tasks and sectors.
“We want people to be able to benefit more broadly from the potential that this technology holds and we want to ensure that there are opportunities created for people,” said Era Dabla-Norris, deputy director at the IMF’s fiscal affairs department and co-author of the report.
She cautioned that the “transition could be painful for workers” who may face prolonged unemployment, particularly older workers who might lack the necessary skills in the AI era. Dabla-Norris added, “You want to be able to cushion this costly transition and maintain social cohesion in societies.”
Contrary to some suggestions, the IMF advised against imposing special taxes on AI to mitigate its adverse effects. The report argues that such measures could hinder productivity growth. Instead, the fund proposed raising taxes on capital gains, profits, and corporate income, which have declined in recent decades.
Previous waves of automation, such as the adoption of robotics, primarily displaced blue-collar and lower-skilled workers. However, AI poses a unique threat to higher-skilled and white-collar workers, who are now at greater risk of job displacement.
To compound this, AI-powered intelligent robots could lead to further automation of blue-collar jobs, potentially exacerbating income and wealth inequality. Back in January, the IMF estimated that AI could impact nearly 40 percent of jobs worldwide, signaling a profound transformation in the global labor market.
This report is similar to one created by Goldman Sachs last year, but it helps to illustrate the unknown consequences of AI scaling into new industries and its impact on labor.
Originally posted on OpenDataScience.com
Read more data science articles on OpenDataScience.com, including tutorials and guides from beginner to advanced levels! Subscribe to our weekly newsletter here and receive the latest news every Thursday. You can also get data science training on-demand wherever you are with our Ai+ Training platform. Interested in attending an ODSC event? Learn more about our upcoming events here.
