The International Monetary Fund (IMF) has raised a red flag on the potential of artificial intelligence (AI) to exacerbate inequality, urging governments to take measures to protect their economies.
What Happened: The IMF expressed “profound concerns” about the possibility of significant labor disruptions and increased inequality as societies transition to generative AI, according to a report released on Monday.
The IMF suggested that countries should enhance unemployment insurance and be prepared for job losses in higher-skilled occupations, a departure from previous disruptive technologies.
The IMF acknowledged the potential of generative AI to boost productivity growth and improve public service delivery but cautioned about the associated labor disruptions and rising inequality. The IMF also highlighted the need for a shift in education and training policies to prepare workers for a rapidly changing job market.
“New generative-AI technologies hold immense potential for boosting productivity and improving the delivery of public services, but the sheer speed and scale of the transformation also raise concerns about job losses and greater inequality.”
The IMF advised against imposing special taxes on AI, which have been suggested as a way to cover the negative effects of AI. Instead, the IMF proposed increasing taxes on capital gains, profits, and corporate income to offset rising wealth inequality.
"We want people to be able to benefit more broadly from the potential that this technology holds and we want to ensure that there are opportunities created for people," said Era Dabla-Norris, Deputy Director at the IMF's Fiscal Affairs Department and co-author of the report, told the Financial Times.
“To reverse this trend, strengthening corporate income taxes could help,” IMF said, adding that a “supplemental” tax on excess profits beyond the minimum effective tax rate on corporate entities could help the cause.
Why It Matters: The IMF’s warning echoes previous concerns raised about the impact of AI on the global job market. IMF Managing Director Kristalina Georgieva had earlier likened the impact of the AI revolution to a “tsunami” and warned of its potential to exacerbate inequality in our society.
These concerns are further compounded by the unease among workers regarding the use of AI in the workplace, as highlighted in a recent report. The “2024 State of AI at Work” report indicates that many workers fear AI could replace human roles and are concerned about the potential stigma of using AI tools.
On the other hand, the increasing use of AI could potentially worsen future economic downturns, as cautioned by IMF deputy chief Gita Gopinath. She stressed the need for governments and authorities to closely monitor the adoption and application of AI across different sectors.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
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