AI Tsunami Warning: IMF Head Reveals 60% of Jobs at Risk - Young Workers Face Biggest Threat

The AI Labor Market Tsunami

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

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

The Stark Numbers

Georgieva revealed that 60% of jobs in advanced economies will be affected by AI - either enhanced, eliminated, or transformed. Globally, this figure stands at 40%. "This is like a tsunami hitting the labour market," she emphasized.

While approximately one in ten jobs in advanced economies has already been 'enhanced' by AI, leading to increased pay for those workers and economic benefits, the outlook is particularly grim for younger workers. Entry-level positions are most vulnerable to elimination, making it harder for young job seekers to secure good placements.

The Middle Class Squeeze

Workers whose jobs aren't directly changed by AI face another threat: potential pay reductions without corresponding productivity boosts from AI integration. "So the middle class, inevitably, is going to be affected," Georgieva predicted.

The Regulatory Gap

Georgieva expressed her greatest concern about insufficient AI regulation. "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," she warned. "Wake up, AI is for real, and it is transforming our world faster than we are getting ahead of it."

Global Perspectives on AI Disruption

Christy Hoffman, general secretary of the UNI global union, echoed these concerns, stating that the fundamental purpose of AI from a business perspective is to increase productivity and lower costs - which often means cutting jobs. She called for fair distribution of productivity benefits across the economy and urged employers to consult with workers before implementing AI tools.

Microsoft CEO Satya Nadella warned that AI could lose its "social permission" to compete for resources like energy if benefits remain concentrated among a few powerful tech firms rather than generating broader societal value, such as developing effective new drugs.

International Cooperation Challenges

European Central Bank President Christine Lagarde highlighted how growing mistrust between rival economies could hamper the AI boom, particularly as the US implements tariff barriers. She emphasized that AI development requires capital, energy, and data intensity, making international cooperation essential for defining new rules of engagement.

Lagarde also sounded alarms about widening global inequality, noting that "disparity is getting deeper and bigger." While Canadian Prime Minister Mark Carney spoke of a permanent "rupture" in the global economic order, Lagarde offered a more nuanced perspective, suggesting we should focus on creating alternatives rather than dwelling on rupture.