Implementing artificial intelligence (AI) could mean “unprecedented shock” in labor markets, as First Deputy Director General of the International Monetary Fund (IMF) Gita Gopinath, for whom there is no guarantee that the benefits will ultimately outweigh the costs, warned and called for a “truly global” set of rules.
In a speech in Glasgow marking Adam Smith’s tercentenary, Kristalina Georgieva’s right-hand man at the IMF suggested that AI could Help reverse the slowdown in global productivity growth automating certain cognitive tasks, creating new, more productive functions for humans.
However, beyond the potential productivity gains, Gopinath noted that AI could “shake up the labor market in an unprecedented way,” warning that after the recent loss of mid-skill jobs due to automation, AI could affect professions and industries in different ways to previous waves of automation.
In this regard, he recalled that recent empirical studies show that AI can reduce labor market polarization putting downward pressure on wages in the highest paid positions, in addition to flattening the hierarchical structure of companies, increasing the number of employees in junior positions and reducing the number in middle and senior management positions.
“The number of jobs affected could be huge,” said a senior IMF official who cannot be guaranteed that the winnings of the winners will be enough to offset the losers.
“It is possible that AI will simply replace human jobs. without any effort to create new, more productive jobs for people,” so despite the potential of AI, he called for consideration of the broad negative impact it could have on employment and the social upheaval it could cause.
Thus, referring to Adam Smith, the economist argued that One “invisible hand” may not be enough to ensure the broad benefits to society from the introduction of AI, therefore, it considers it necessary and urgent to establish strong and reasonable regulations that ensure the use of this innovation for the benefit of society.
“When it comes to AI, we need more than new rules. We have to recognize that this can be a completely new game and that it will require a completely new approach to public policy,” he said, adding that the proposal put forward by the EU is an encouraging start.
In this sense, he considered “encouragingly” that the G7 have formed a working group to study AI. “We need a truly global set of rules,” Gopinath defended, emphasizing that given the speed of technology, time is of the essence.
(Europe Press)
Source: Aristegui Noticias
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
