Artificial Intelligence (AI) is already reshaping the job market, and the impact is not what many expected. According to IMF Managing Director Kristalina Georgieva, AI is creating jobs overall, but the benefits are uneven.
Speaking to India Today, she said the total impact on employment in countries studied so far appears “positive”. However, she warned that the gains are not equally shared.
AI JOBS PAY MORE, BUT MIDDLE ROLES ARE SHRINKING
Georgieva pointed to the United States as an example. “Already in the United States, 1 in 10 jobs require AI enhanced skills, and it pays more.”
People with AI-linked skills are earning better salaries. With more money in their pockets, they are spending more. That spending, she explained, is creating demand for low-skilled jobs in restaurants, hotels and entertainment.
Georgieva added that while the overall impact on employment is positive, it is largely driven by a rise in low-paying jobs, which is squeezing middle-income roles.
She also highlighted another concern, i.e., automation is removing entry-level jobs. “We also see automation eliminating entry-level jobs. So, recent graduates, they worry, where is the job for me?”
POLICYMAKERS MUST ACT NOW
Georgieva said that governments are not powerless. “We are not helpless.” She suggested two key steps. First, education must change. “Redefine education for the era of AI. Learn to learn and be adaptable.” She said people must build skills that help them adjust quickly as jobs change.
Second, countries must build strong social safety nets, so people have support if they are temporarily displaced. She praised Denmark’s “flex security” model, which combines flexible labour markets with strong worker protection. She also congratulated India for its labour market reforms but said flexibility must go hand in hand with security.
INDIA’S DIGITAL FOUNDATION GIVES IT AN EDGE
Georgieva said India is in a strong position because it invested early in digital public infrastructure. “India invested over the last years in digital public infrastructure. It is the foundation for AI to be more accessible.”
She referred to India’s digital ID system covering 1.4 billion people, which boosted the digital economy. Now, she said, AI can build on that base. “The democratisation of AI is impressive in India.”
She added that India’s model, i.e., designing AI for specific sectors and activities, may be more useful for developing countries than the high-tech corporate approach seen in the US.
GROWTH POTENTIAL, BUT RISKS NEED GUARDRAILS
Georgieva believes AI could lift global growth by around 0.8%. “We see this potentially lifting global growth by 0.8%.” That could push global growth above pre-pandemic levels. At present, she described growth as “anaemic” at 3.3%.
But she cautioned that the biggest worry should be the lack of guardrails. “We want AI for good, not for evil. We want AI that protects dignity and the rights of humans.”
She said countries must work together to create ethical foundations and sensible safeguards, i.e., without choking innovation. “We have seen far too many times suffocating innovation with excessive regulation.”
EUROPE, REGULATION AND THE BALANCE
Drawing from her experience in Europe, Georgieva said the region prefers the term “efficient regulation” rather than “deregulation”. The aim is to reduce red tape without removing worker protections.
She said Europe must simplify rules, deepen its single market and allow freer movement of capital and skills, but with balanced oversight.
TRADE TENSIONS AND A MULTIPOLAR WORLD
On global trade, Georgieva said that while US tariffs initially shocked markets, many countries responded by strengthening regional and bilateral trade agreements instead of pulling back.
“Trade is like water. You put an obstacle, it goes around it.”
She said the world is now clearly multipolar. Trade relations may become more complex, with more regional agreements, but global trade will continue. “We cannot pull apart. There is no going back.”
In other words, Georgieva’s message was clear: AI brings huge opportunity — but also serious risks.
It can boost growth and create jobs. Yet it may deepen inequality, squeeze middle-income roles and make life harder for young job seekers.
The answer, she said, lies in balance — encourage innovation, invest in people, protect workers and build smart guardrails.
If countries work together, AI could lift the global economy. If not, it could widen divides that are already visible.
– Ends
