IMF: 60% of Jobs in Advanced Economies Impacted by AI!
How much more inequality will it create as jobs are replaced?
The IMF lays out our AI future as one of stark contrasts. A utopian view where AI jumpstarts productivity, boosts global growth, and raises incomes worldwide, and the other dystopian is where it replaces jobs and deepens inequality.
The AI era is upon us, and it will be up to policymakers and businesses to work together to form policies that ensure it brings prosperity to all and NOT increase inequality.
I am less optimistic and think it will bring greater inequality.
👉TAKEAWAYS
Almost 40 percent of global employment is exposed to AI, with advanced economies at greater risk but also better poised to exploit AI benefits than emerging market and developing economies.
In advanced economies, about 60 percent of jobs are exposed to AI, due to prevalence of cognitive-task-oriented jobs.
AI will affect income and wealth inequality. Unlike previous waves of automation, which had the strongest effect on middle-skilled workers, AI displacement risks extend to higher-wage earners. ….the effect on labor income inequality depends largely on the extent to which AI displaces or complements high-income workers.
The gains in productivity, if strong, could result in higher growth and higher incomes for most workers.
Owing to capital deepening and a productivity surge, AI adoption is expected to boost total income.
College-educated workers are better prepared to move from jobs at risk of displacement to high-complementarity jobs.
Older workers may be more vulnerable to the AI-driven transformation.
Exposure is higher for women and for more educated workers but is mitigated by a higher potential for complementarity with AI.
Occupations can be categorized into three groups: “high exposure, high complementarity”; “high exposure, low complementarity”; and “low exposure”
High-exposure, low-complementarity occupations are well positioned for AI integration, but there is a greater likelihood that AI will replace human tasks.
👊STRAIGHT TALK👊
So our AI-disrupted science fiction future is finally upon us!
We’ve seen it in the movies for years, and it was always just out of reach, but it’s here now and will impact the lives of everyone, and that means you, dear reader.
The irony is that the AI age is unlike the machine age that impacted people who work with their hands. AI will impact knowledge workers and is coming straight for your white-collar job. That’s what makes this different.
The best example of this is that Low-income countries have only about 25% of their workforce impacted by AI, while advanced economies have 60%! This is mostly due to the higher percentage of knowledge workers.
The IMF implies that AI isn’t going to displace to blue-collar workers but purposefully ignores AI embedded in robots. That the IMF doesn’t consider this future is, in my view, a major oversight. We all know that it’s coming.
I bring this up because it will be critical for determining AI’s impact on inequality.
The IMF states: “The overall impact of AI on income levels and inequality will depend on the extent to which gains in economic activity generated by AI-induced productivity compensate for any labor income losses.”
The problem is that with robotics and AI, productivity increases at the expense of labor income. Think self-driving trucks and truck drivers.
If that sounds dire, it is, and I don’t expect that regulators will come up with an easy fix or that corporations will act benevolently and keep employees on payroll.
This is why I think greater inequality is hard-wired into our new AI world.
Now that is scary!
Thoughts?
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