The International Monetary Fund (IMF) has previously stated that the introduction of generative artificial intelligence (AI) could significantly impact employment, especially in advanced economies. Approximately 40% of global jobs are at risk of being affected by AI, with 60% of jobs in advanced economies potentially being impacted. This could lead to changes in labor demand, wages, and hiring practices in these countries.
Speaking at a panel discussion at the European Central Bank’s Forum on Central Banking in Portugal, Federal Reserve Chair Jerome Powell noted the significant investments being made in AI and suggested a major shift in the future. While central banks may not have direct control over the effects of AI on the job market, Powell mentioned that the Federal Reserve is dedicating a substantial amount of time and resources towards understanding and analyzing the potential impacts. However, it is still unclear whether AI adoption will lead to the elimination of jobs or create new ones.
Citi released a report in June highlighting the potential impacts of AI on various industries. Finance jobs were identified as particularly susceptible to automation, with 54% of jobs having a high potential for automation and another 12% having the potential to be augmented by AI. Other industries such as insurance, energy, and capital markets also face a high potential for automation according to the report.