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| IMF Managing Director Kristalina Georgieva warns that AI is disrupting the labor market like a "slow-moving tsunami," making it harder for young graduates to find entry-level jobs and demanding a structural shift in how governments support youth employment. |
International Monetary Fund (IMF) Managing Director Kristalina Georgieva has issued a stark warning about the impact of artificial intelligence on the global workforce, describing it as a “slow-moving tsunami” that is particularly threatening to young people entering the job market.
Speaking at a panel discussion on Monday, October 12, Georgieva explained that AI is eroding traditional entry-level and routine jobs, which have long served as the first rung on the career ladder for young workers. “People to worry about, first and foremost, [are] young people that are coming into the labor market,” she said. “Normally, they would get into these routine, repetitive jobs and then grow up the ranks. But if they’re gone, I don’t think any young person wants to be a barista in a coffee shop as ... professional future.”
The discussion highlighted a growing concern among policymakers about managing AI-driven disruption. Singapore President Tharman Shanmugaratnam, who co-chairs the World Bank’s Jobs Council, called for a fundamental shift in government policy. He argued that employment support programs used during crises like the COVID-19 pandemic should be made permanent.
What governments did during the pandemic “now has to be thought of not as a crisis measure, but as part of the structural, the menu of structural policies,” Shanmugaratnam stated. He urged closer cooperation with businesses and incentives to hire fresh graduates, warning that “the first rung in employment, your first job upon graduation, is now seeing less demand.”
Adding to the demographic pressures, World Bank President Ajay Banga estimated that 1.2 billion young people will turn 18 over the next 15 years. He emphasized that the private sector, which generates 75 to 85 percent of jobs, must absorb most of them. “It is private capital that creates jobs,” Banga said, calling on governments to develop infrastructure, establish sound policies, and reduce investment risks to encourage private sector growth.
Georgieva noted that IMF estimates show about 40 percent of jobs worldwide will eventually be “augmented, downgraded or eliminated” by AI. While advanced economies face a 60 percent exposure rate compared to 23 percent in low-income countries, she cautioned that this is “just because AI is further away” in poorer nations.
Shanmugaratnam pointed to the United States as a prime example of the pressure, noting that for the first time in a century, demand for graduates has fallen alongside a shrinking wage premium for university degrees. He warned that prolonged job-search difficulties could damage graduates’ skills and confidence. “You lose trust in the future,” he said.
Despite these risks, Georgieva noted that AI-related investment has helped support global economic growth, which remains near 3 percent. She estimated that AI adoption could raise growth by 0.5 to 1 percentage point in advanced Asian economies and 0.2 to 0.8 percentage points in emerging Asian economies. At the upper end, she added, these gains “would more than offset the loss that comes from aging population.”
However, Shanmugaratnam cautioned that stronger economic growth does not automatically translate into sufficient employment. He pointed to China, India, and developing Southeast Asia, which are “growing quite well, but job creation is weak,” and warned that AI “is going to widen that divergence if we are too passive about it.” He added that displacement would occur “task by task,” giving governments, employers, and educators time to adapt through workplace learning and a greater emphasis on applied training in universities.