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The IMF said it had “deep concerns” about massive labor disruptions and rising inequality as societies move towards generative AI, and urged governments to do more to protect their economies.
In a report published Monday, the fund said countries should take action such as improving unemployment insurance, warning that unlike disruptive technologies of the past, AI could lead to job losses in higher-skilled occupations.
While the IMF said generative AI has enormous potential to boost productivity growth and advance the delivery of public services, it warned it also “raises profound concerns about massive labor disruptions and rising inequality.”
Generative AI, the ability of computers to automatically generate text or images using generative models, gained widespread attention with the launch of OpenAI’s ChatGPT in late 2022. Although many companies have been slow to adopt it thus far, it has led to a recovery in the global market. tech stocks.
Regulating AI has become a concern. The EU has agreed a first-of-its-kind AI law that addresses the risks posed by the rapidly evolving technology, with a possible outright ban on AI applications that pose unacceptable risks to security, livelihoods and the rights of EU citizens.
In its report, the IMF states that education and training policies must adapt to the new reality to prepare workers for a rapidly changing labor market in the future, with a greater emphasis on the provision of lifelong learning. Sector-oriented training, apprenticeships and reskilling programs could play a greater role in helping workers transition to new roles and sectors, the report said.
“We want people to benefit more widely from the potential this technology offers and we want to ensure that opportunities are created for people,” said Era Dabla-Norris, deputy director of the IMF’s fiscal affairs department and co-author . of the report.
She added that the “transition could be painful for workers” who face the prospect of higher and longer unemployment, as “older workers may not have the skills needed in the age of AI and more time may take longer than in the past to acquire them. new skills”.
“You want to be able to accommodate this precious transition and maintain social cohesion in societies,” she said.
The IMF advised against special taxes on AI, which have been proposed as a way to raise revenue to cover the negative impacts of AI, arguing that they could hinder productivity growth.
Instead, the IMF has proposed raising taxes on capital gains and profits, levies that have fallen in recent decades, and corporate taxes, to help offset rising wealth inequality.
Previous waves of automation, such as the adoption of robotics, mainly displaced blue-collar and lower-skilled workers, while higher-skilled workers and white-collar workers are seen as the most exposed to AI.
However, AI is also capable of powering more intelligent robots and could also lead to further automation of blue-collar jobs, the IMF warned. This could increase income and wealth inequality.
Generative AI could also result in a further increase in the market power and economic returns of dominant companies “in increasingly concentrated winner-take-all markets” as capital becomes increasingly concentrated in the hands of fewer companies.
In January, the IMF estimated that AI would impact nearly 40 percent of jobs around the world, replacing some and complementing others. That echoed a 2023 Goldman Sachs report that estimated AI could replace the equivalent of 300 million full-time jobs while creating new ones and boosting productivity.
The IMF said that given the uncertainty about the future of AI, governments must adopt an “agile” approach that prepares them for “highly disruptive scenarios”.
Because of AI’s global reach, Dabla-Norris says, “it will be more important than ever for countries to work together.”