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Artificial Intelligence and Job Loss  |

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 cybersecurity.

∙ 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.

ο 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

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