Artificial Intelligence and Job Loss

Context:

?   AI will affect 40% of jobs and probably worsen inequality, according to the head of the International Monetary Fund (IMF).

Analysis by the IMF

?   About 60% of jobs in advanced economies such as the US and UK are exposed to AI and half of these jobs may be negatively affected.

?   AI’s ability to affect highly skilled jobs means that advanced economies face greater risks from the technology.

?   The technology will also help to enhance some humans’ productivity as AI improves their performance.

?   The safest highly exposed jobs are those with a “high complementarity” to AI, meaning the technology will assist their work rather than displace it entirely.

?   This includes roles with a high degree of responsibility and interacting with people – such as surgeons, lawyers and judges.

?   High-exposure jobs with “low complementarity” – meaning the potential for being displaced by AI.

?   This includes telemarketing, or cold-calling people to offer goods or services.

?   AI applications may execute key tasks currently performed by humans, which could lower labour demand, leading to lower wages and reduced hiring.

?   Low-exposure occupations include dish washers and performers.

?   AI jobs exposure is 40% in emerging market economies – defined by the IMF as states including China, Brazil and India – and 26% for low-income countries, with an overall total of just under 40%, according to the IMF.

?   In most scenarios AI would probably worsen overall inequality across the global economy and could stoke social tensions without political intervention.

?   The IMF analysis shows that higher-wage earners whose jobs have     high complementarity with AI can expect an increase in their income, leading to an increase in inequality.

AI Driven Other Positive Side

?   Job creation: AI also creates new opportunities in fields like AI development, data analysis, and cyber security.

?   Increased productivity: AI can boost productivity and efficiency in various sectors, potentially leading to economic growth and job creation in different areas.

?   Reskilling and adaptation: With proper training and support, workers whose jobs are affected by AI can re-skill and adapt to new roles in demand.

?   The net effect of AI on employment remains uncertain. Some predict job losses due to automation, while others suggest AI will create more jobs than it displaces.

?   The actual impact will likely vary depending on a range of factors like the rate of technological advancement, government policies, and the adaptability of workers.

Measures

?   Investing in education and training: Equipping workers with the skills needed for the AI-driven economy is crucial.

?   Social safety nets: It is crucial for countries to establish comprehensive social safety nets like unemployment benefits and offer retraining programmes for vulnerable workers.

?   In doing so, we can make the AI transition more inclusive, protecting livelihoods and curbing inequality.

?   Regulation and ethical considerations:            Implementing responsible AI development and ensuring fair distribution of the benefits of AI are important considerations.

?   AI property rights: Countries’ choices regarding the definition of AI property rights, as well as redistributive and other fiscal policies, will ultimately shape its impact on income and wealth distribution.

?   Mid-career transitions: AI could help with mid-career transitions as this is the age where expertise is at fingertips. So anyone can become an expert as an AI assistant is there to help.

Way Ahead:

?   The relationship between AI and job loss is complex and multifaceted. While AI poses potential risks of job displacement, it also offers opportunities for new jobs and economic growth.

?   The key is to manage the transition effectively through reskilling, social safety nets, and responsible AI development.

?   By acknowledging the challenges and proactively preparing for the future, we can ensure that AI benefits everyone and contributes to a more equitable and prosperous future.