CEM REPORT, TECHNOLOGY | As the world’s elite gathers in Davos for the World Economic Forum, a chilling prediction hangs in the air: nearly 40% of jobs globally could be touched by artificial intelligence (AI), with a profound impact on inequality, warns the International Monetary Fund (IMF).
Managing Director Kristalina Georgieva sounded the alarm, stating in a Bloomberg report, “In most scenarios, AI will likely worsen overall inequality, a troubling trend that policymakers must proactively address to prevent the technology from further stoking social tensions.”
This concern stems from the nature of AI. Georgieva explains in a blog post on the study, “AI’s income inequality effect will largely depend on how much the technology complements high earners.” If AI boosts the productivity of already wealthy individuals and companies, it could widen the wealth gap even further. To combat this, she urges countries to implement “comprehensive social safety nets” and retraining programs for workers vulnerable to AI displacement.
The study’s analysis paints a stark picture, particularly for advanced economies. Georgieva predicts that AI will sweep “about 60% of jobs” compared to around 40% in emerging and low-income nations. This disparity is partly due to the nature of the work itself, with higher-skilled jobs in developed economies more susceptible to automation than manual labour in developing countries.
This echoes the anxieties of many employees across the globe, as companies increasingly embrace AI. Buzzfeed’s recent decision to replace its core news department with AI-powered content creation and lay off over 100 staff members serves as a stark example.
The potential societal implications of AI have sparked a global regulatory debate. The European Union recently reached a tentative agreement on AI safeguards, while the US grapples with its own approach.
Georgieva’s concerns resonate with the ongoing discussions at the World Economic Forum in Davos, where AI is a major topic of debate. Companies are increasingly investing in AI technologies, sometimes at the cost of human jobs.
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Impact of AI on Existing Inequalities
In the face of this technological juggernaut, the question becomes: will AI exacerbate existing inequalities or pave the way for a more equitable future? The answer lies in the choices we make today, both as policymakers and as individuals navigating a rapidly transforming world.
Unemployment and underemployment seem to be upon the world. Recall a CEM report where the International Labour Organisation (ILO) predicted a slight rise in unemployment and a widening gap between the haves and have-nots.
While the ILO report did not link unemployment to artificial intelligence, it predicts the global unemployment rate to edge up from 5.1% to 5.2%, translating to an additional 2 million people joining the ranks of the jobless. This may seem like a small increase, but it represents a reversal from the 5.3% witnessed in 2022.
With the rate companies have been throwing cash at emerging technology, sparking concern among employees about the future of their roles, the global unemployment rate faces severe threats in the coming future.
