AI 'Tsunami' Threatens 60% of Jobs: Young Workers Face Biggest Risk, IMF Warns

AI's Impact on the Labor Market

Artificial intelligence is poised to create a "tsunami hitting the labour market," with young people expected to be the most affected, according to Kristalina Georgieva, head of the International Monetary Fund. Speaking at the World Economic Forum in Davos, she highlighted that the IMF's research indicates a significant transformation in skill demand as AI technology becomes more widespread.

Kristalina Georgieva speaking in Davos. Photograph: Denis Balibouse/Reuters

The Numbers Behind the Warning

Georgieva revealed that 60% of jobs in advanced economies will be affected by AI—either enhanced, eliminated, or transformed—with 40% globally facing similar impacts. She noted that in advanced economies, one in ten jobs has already been "enhanced" by AI, leading to increased pay for these workers and positive knock-on effects for local economies.

However, the outlook is less optimistic for younger workers. Georgieva warned that AI will wipe out many entry-level roles traditionally filled by younger employees. "Tasks that are eliminated are usually what entry-level jobs do at present, so young people searching for jobs find it harder to get to a good placement," she explained.

Broader Economic Implications

The middle class is also at risk, according to Georgieva. Workers whose jobs aren't directly changed by AI may see their pay fall without a corresponding productivity boost from the technology. "So the middle class, inevitably, is going to be affected," she predicted.

Georgieva expressed concern about the lack of regulation surrounding AI. "This is moving so fast, and yet we don't know how to make it safe. We don't know how to make it inclusive. Wake up, AI is for real, and it is transforming our world faster than we are getting ahead of it," she urged.

Voices from the Forum

Christy Hoffman, general secretary of the UNI global union, echoed these concerns, stating, "It's just a basic premise that the point of AI, on the business side, is to increase productivity, therefore lower costs—which will be cutting jobs." She called for fair distribution of productivity gains and urged employers to involve workers in discussions about AI implementation.

Microsoft CEO Satya Nadella warned that AI could lose its "social permission" to compete for resources like energy if it fails to benefit society beyond a few powerful tech firms. Meanwhile, European Central Bank President Christine Lagarde highlighted that the AI boom might be hampered by growing mistrust between economies and widening global inequality.

Lagarde emphasized the need for international cooperation, noting that AI is capital intensive, energy intensive, and data intensive. "If countries did not work cooperatively and 'define the new rules of the game,' there would be less capital and less data," she said.