IMF's Georgieva Says AI Is a 'Slow-Moving Tsunami' for Young Job Seekers

International Monetary Fund Managing Director Kristalina Georgieva cautioned that artificial intelligence is affecting the global labor market in the manner of a “slow-moving tsunami,” leaving young graduates especially exposed as entry-level positions face strain. During a panel on Monday, October 12, Georgieva noted that the loss of routine jobs might erode the customary path by which younger workers build experience and move up in their careers. “People to worry about, first and foremost, [are] young people that are coming into the labor market,” she stated. “Normally, they would get into these routine, repetitive jobs and then grow up the ranks. But if they’re gone, I don’t think any young person wants to be a barista in a coffee shop as ... professional future.” Singapore President Tharman Shanmugaratnam, who co-chairs the World Bank’s Jobs Council, pressed governments to convert employment assistance deployed during economic downturns into lasting programs that help young people enter the workforce. Actions taken during the COVID-19 pandemic and, in certain cases, the global financial crisis “now has to be thought of not as a crisis measure, but as part of the structural, the menu of structural policies,” he said. Shanmugaratnam advocated stronger collaboration with companies and incentives for hiring new graduates, cautioning that “the first rung in employment, your first job upon graduation, is now seeing less demand.” The talks underscored a widening concern among policymakers about handling AI-driven disruption, even as aging populations, especially in Asia, threaten to shrink the labor pool. World Bank President Ajay Banga projected that 1.2 billion young people would reach age 18 over the coming 15 years. He said the private sector, responsible for generating between 75 and 85 per cent of jobs in any given country, would have to take in the majority of them. Governments should assist by building infrastructure, adopting suitable policies and lowering investment risks that hold back private capital, he said. “It is private capital that creates jobs,” Banga added. Georgieva said IMF projections suggested roughly 40 per cent of jobs globally would ultimately be “augmented, downgraded or eliminated” by AI. Exposure was about 60 per cent in advanced economies and 23 per cent in low-income countries. Still, she warned that poorer nations’ smaller exposure was “just because AI is further away.” Shanmugaratnam said the strain was especially clear in technology-related employment. In the United States, “for the first time in a century, demand for graduates has gone down,” he said, while the wage premium for university degrees has also contracted. He cautioned that extended job-search difficulties could harm graduates’ skills and confidence. “You lose trust in the future,” he said. Even with the employment dangers, Georgieva said AI-related investment and trade had bolstered economic growth this year, helping keep global expansion close to three per cent despite a shock to energy supplies. “Love it, hate it, or fear it. It [AI] is here, and we are already seeing the first wave of impact,” she said. She estimated that AI adoption might lift growth by 0.5 to one percentage point in advanced Asian economies and by 0.2 to 0.8 percentage points in emerging Asian economies. At the higher end, those gains “would more than offset the loss that comes from aging population,” she added. Shanmugaratnam warned that faster economic growth would not by itself produce enough jobs. China, India and developing Southeast Asia were “growing quite well, but job creation is weak,” he said, warning that AI “is going to widen that divergence if we are too passive about it.” However, he said displacement would happen “task by task,” giving governments, employers and educational institutions time to react. “And that gives us time,” he said, emphasizing the value of workplace learning and a stronger focus on applied training at universities.