The International Monetary Fund’s Managing Director Kristalina Georgieva has likened the impact of artificial intelligence on global labor markets to a “slow-moving tsunami,” warning that approximately 40% of jobs worldwide will eventually be affected. Young graduates are particularly vulnerable as AI disrupts routine and entry-level roles, challenging traditional career progressions. Georgieva highlighted concerns that with fewer low-skill jobs available, recent graduates might face diminished opportunities, urging policymakers to address this shift urgently.

Singapore President Tharman Shanmugaratnam, who co-chairs the World Bank Jobs Council, urged governments to institutionalize employment support measures that were first introduced during crises like the Covid-19 pandemic. He emphasized that such policies should be part of a permanent strategy to stimulate demand for young workers and facilitate their transition into the workforce. Tharman warned that declining demand for graduates, especially in advanced economies including the U.S., is leading to diminished wage premiums and skill erosion among new entrants, which risks long-term disillusionment.

World Bank President Ajay Banga offered a somewhat more optimistic view, noting that although AI will create disruption in developed countries, emerging and lower-middle-income nations might benefit substantially from “small AI” technologies. These AI tools could foster job creation and productivity growth in these regions, where 1.2 billion young people are expected to join the workforce over the coming 15 years. Banga stressed the importance of private sector involvement, as it already generates the majority of global employment.

Both leaders agreed that while AI is driving economic growth—boosting GDP by up to 1 percentage point in advanced Asian economies—job creation has not kept pace in many rapidly growing countries. Tharman cautioned that AI’s impact on employment will unfold incrementally, task by task, which provides time for workers to adapt through on-the-job learning and updated educational approaches. The key challenge remains how governments and businesses can collaborate to manage the transition and ensure young workers are not left behind as AI reshapes the labor market.