A Tsunami for the Labour Market
In a series of recent statements, IMF Managing Director Kristalina Georgieva has outlined a profound and imminent disruption to the global workforce, driven by artificial intelligence. According to the IMF's analysis, approximately 40% of all jobs worldwide
are exposed to AI, meaning they will either be augmented, downgraded, or eliminated entirely. This figure is even higher in advanced economies, reaching 60%, while low-income countries see a lower exposure of 23% — not because they are safer, but because the technology has yet to fully permeate their economies. Georgieva's message, delivered at the annual IMF-World Bank meetings, is a clear signal that policymakers can no longer delay action. The tsunami is coming, and preparation is the only way to weather the storm.
The Double-Edged Sword of Progress
The IMF's assessment isn't entirely dire. Georgieva notes that AI could add up to half a percentage point to annual global growth, a massive boost to the world economy. In Asia, it could add between 0.5 to 1 percentage point to growth in advanced economies, helping to offset the economic drag from ageing populations. However, these gains are not guaranteed to be shared equally. The boom is currently concentrated in countries with strong tech sectors like the US, China, and India, which are key producers in the AI supply chain. This risks widening the economic divide between the world's rich and poor nations. Even within countries, AI could deepen inequality by shifting economic gains toward capital owners and away from labour, which has traditionally formed the backbone of the government tax base.
Young Workers on the Front Line
One of the most immediate concerns highlighted by Georgieva is the impact on young people entering the workforce. AI is rapidly hollowing out demand for routine, repetitive tasks—the very entry-level jobs that have traditionally served as the first rung on the career ladder. These roles allow new workers to gain experience and 'grow up the ranks'. As they disappear, there is a real risk that young people will find it harder to transition from education into stable, long-term careers. The IMF's analysis shows that while some high-skill jobs requiring AI proficiency are seeing higher wages, there is also a simultaneous growth in lower-paying jobs in sectors like construction and data centre services—a trend Georgieva described as 'not a story to celebrate'.
A Call for New Social Safety Nets
So, what does preparing workers mean in practice? According to the IMF, the answer goes far beyond simple retraining programmes. Georgieva is calling on governments to rethink education systems to equip people with skills that complement AI, such as creativity and critical thinking. But more profoundly, the IMF suggests a need to strengthen social safety nets and make labour markets more flexible. This includes improving access to unemployment benefits and support systems to cushion the blow for those whose jobs are displaced. Singapore's President, Tharman Shanmugaratnam, speaking alongside Georgieva, urged governments to make the kind of widespread labour support used during the pandemic a permanent structural feature of the economy. The core message is that proactive and robust policy choices are required now to manage this transition and ensure that the benefits of AI are shared broadly across society.
