IMF Warns AI Is Hitting Jobs Like a 'Slow-Moving Tsunami'
At the IMF-World Bank meetings in Bangkok, officials said AI is already thinning entry-level hiring for young graduates even as it props up global economic growth.
What happened: At the IMF and World Bank's annual meetings in Bangkok on October 12, IMF chief Kristalina Georgieva said AI is moving through the global labor market like a 'slow-moving tsunami,' hitting young job-seekers hardest. Singapore's Tharman Shanmugaratnam, who co-chairs the World Bank's Jobs Council, urged governments to turn pandemic-era job-support programs into a permanent policy tool rather than a one-time emergency fix. World Bank President Ajay Banga added that 1.2 billion young people will turn 18 over the next 15 years, and the private sector will have to absorb most of them into work.
Why it matters: The IMF estimates roughly 40% of jobs worldwide will eventually be augmented, downgraded, or eliminated by AI, with about 60% of jobs exposed in rich countries versus 23% in poorer ones, a gap Georgieva says reflects timing, not safety. In the US, demand for new graduates has fallen for the first time in a century, and the wage premium for a college degree is shrinking. Entry-level, routine work, the traditional first rung for new workers, is vanishing fastest, while AI is also pushing more people into lower-paying jobs in fields like construction. Georgieva warned this could also erode government tax revenue, since AI shifts income toward capital rather than labor.
How it works, plainly: Officials describe the disruption as happening 'task by task' rather than all at once, which gives workers and schools time to adjust if they move fast. AI is simultaneously a drag on entry-level jobs and a boost to overall output. The IMF expects it could add up to a full percentage point to growth in advanced Asian economies, potentially outweighing the drag from aging populations. But faster growth doesn't guarantee more jobs: Shanmugaratnam noted China, India, and Southeast Asia are growing while job creation stays weak, and said AI will widen that gap unless governments step in.
What comes next: The Jobs Council wants governments to make crisis-style hiring incentives a standing policy, encouraging private firms to keep taking on fresh graduates, while using public money to de-risk private investment that creates jobs. Universities are being pushed toward more applied, on-the-job style training so graduates arrive with skills AI hasn't absorbed yet. No binding commitments came out of the Bangkok meetings; the remarks were warnings and recommendations, not new programs, and which governments will actually act remains unclear.