AI's Impact on Jobs: Why Young Workers Face the Greatest Risk, According to IMF Chief

Artificial intelligence (AI) is poised to dramatically reshape the labor market, with young workers expected to bear the brunt of this transformation. Kristalina Georgieva, managing director of the International Monetary Fund (IMF), described AI’s impact as a “tsunami” hitting jobs, warning at the World Economic Forum in Davos that 60% of jobs in advanced economies will be affected in the coming years. This influence includes roles being enhanced, transformed, or outright eliminated. Globally, the figure is estimated at 40%, underscoring the widespread reach of AI technologies. Georgieva highlighted that while some jobs have already been enhanced by AI—boosting productivity and wages—many entry-level positions, often filled by younger workers, are at risk of disappearing. These roles typically involve routine tasks that AI can automate, making it harder for young people to secure initial employment and gain workplace experience.

The IMF chief also cautioned that workers whose jobs are not directly altered by AI could still face wage pressures if productivity gains do not materialize. This scenario threatens the middle class, which may experience stagnant or declining incomes despite technological advancements. Georgieva’s concerns extend beyond job displacement to the broader societal implications of AI, particularly the lack of sufficient regulation. She stressed the urgency of developing frameworks to ensure AI is safe, inclusive, and beneficial for all, warning that the technology is advancing faster than governance mechanisms can keep up.

The discussion at Davos reflected a broader debate on AI’s dual nature—its potential to drive economic growth and innovation versus the disruption it causes in labor markets. Christy Hoffman, general secretary of the UNI global union, emphasized that AI’s primary business goal is to increase productivity and reduce costs, often at the expense of jobs. She called for proactive management of this disruption, advocating for fair distribution of AI’s economic gains and meaningful dialogue between employers and workers before deploying AI tools. This approach aims to balance technological progress with social equity and worker protections.

Other leaders at Davos echoed concerns about AI’s broader economic and geopolitical implications. Microsoft CEO Satya Nadella warned that AI could lose public support if its benefits remain concentrated among a few powerful tech companies without delivering widespread societal advantages, such as breakthroughs in healthcare. Meanwhile, European Central Bank President Christine Lagarde highlighted the risks of growing mistrust and protectionism between major economies, which could stifle AI development. She pointed out AI’s heavy reliance on capital, energy, and data, stressing the need for international cooperation to establish new rules governing AI’s use and development. Lagarde also raised alarms about widening global inequality, cautioning that disparities could deepen if AI’s benefits are not shared equitably.

The conversations at Davos underscore a critical juncture in the global economic order. While some leaders, like Canadian Prime Minister Mark Carney, speak of a potential rupture due to erratic trade policies, others, including Lagarde, advocate for exploring alternatives through collaboration rather than division. The consensus is clear: AI’s rapid advancement demands coordinated efforts to harness its potential while mitigating its risks, particularly for vulnerable groups like young workers entering the labor market. Without such measures, the promise of AI could be overshadowed by increased inequality and social disruption.