Connect with us


Generative AI will disrupt jobs and increase inequality, the IMF warns



The IMF warns of significant labour disruptions and widening inequality due to generative AI. Governments are urged to enhance economic protections and invest in reskilling programs to safeguard economies and support affected workers.

The International Monetary Fund (IMF) has issued a stark warning about the deep labor disruptions and inequality that generative AI can cause, urging governments to strengthen economic protections to protect their economies.

In a recent report, the IMF highlighted that advances in AI technology could lead to significant disruptions in the labor market, especially for higher-skilled occupations. Unlike previous technological shifts, generative AI could lead to significant job losses in positions that require advanced skills, potentially widening economic inequality.

To address these challenges, the IMF recommends that governments strengthen unemployment insurance and other safety nets to support workers displaced by advances in AI. Strengthening these measures is essential to protect the well-being of citizens and maintain economic stability.

Despite these concerns, the IMF recognizes AI’s potential to increase productivity and improve public services. However, the rapid adoption of this technology comes with significant risks that must be carefully managed. In response, the European Union has proposed the AI ​​Law, a comprehensive regulation aimed at limiting AI-related dangers, including potentially banning applications that threaten security and fundamental rights.

**Education and training system updates**

Preparing for the future requires modernizing education and training systems. As the labor market evolves, there will be a greater need for lifelong learning and opportunities for workers to retrain and adapt to new roles. The IMF report highlights the importance of sector-based training, apprenticeships and reskilling programs to help workers transition to new tasks and sectors in an AI-driven economy.

“We want people to broadly benefit from the potential this technology offers and ensure opportunities are created for them,” said Era Dabla-Norris, deputy director of the IMF’s fiscal department and co-author of the report . She noted that the “transition could be painful for workers” who face longer unemployment spells due to a lack of necessary skills in the age of AI, which may take longer to acquire than in the past.

**Industry Insights**

Sheila Flavell CBE, COO of FDM Group, highlighted the need for a joint effort between government, education and industry to create a level playing field and ensure staff can safely maximize AI benefits. She advocated a combination of apprenticeships and upskilling and reskilling programs to create a digitally adept, multi-generational workforce.

Dr. Adeshola Cole, CEO of Tritek Consulting, emphasized the importance of staff equipping themselves with the necessary skills to manage AI development. He highlighted the rush by organizations to adopt AI tools, often without having the digitally skilled workforce to manage AI risks, underscoring the need for practical sector-focused training.

Sai Bendi, Software Development Manager at Encompass Corporation, pointed out that employers must provide the learning and development support that individuals need to keep pace with technological changes and be confident in using AI solutions effectively.

As generative AI continues to transform industries, the IMF’s warning underlines the urgency of comprehensive strategies to manage its impact on the labor market and ensure equitable economic growth.