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Is AI threatening employment stability? Here’s what economist says

Illustration of construction workers. (Photo: Public Communication Bureau PUPR Ministry)

UNAIR NEWS – The International Monetary Fund (IMF) has identified the development of Artificial Intelligence (AI) technology as it has the potential to exacerbate inequality and lead to a loss of 40 percent of jobs. These jobs are predicted to be replaced by AI. What are the threats of AI to employment stability in Indonesia?

Economics expert Prof. Dr. Sri Herianingrum SE MSc from Universitas Airlangga pointed out that these threats will target low-skilled jobs. All such jobs can be replaced by technology automation, such as robots.

“Low-skilled jobs that can be automated with robots and the like will also reduce the workforce. For instance, jobs in the service sector, especially those involving routine and repetitive tasks,” she said.

The use of AI in banking institutions may reduce the number of workers needed for administrative tasks and customer service. Consequently, there will be a reduction in jobs automated by AI systems.

Prof. Sri emphasized that special attention is needed to address the impact of AI. While the adoption of artificial intelligence can enhance overall productivity, it can also lead to a shift in market structure as companies rely more on capital and technology (capital-intensive).

“It can lead to an increase in the gap between large and small to medium-sized enterprises. Additionally, it can increase the difficulty for low-skilled workers to find employment,” she added.

Is AI threatening employment stability? Here's what economist says

“It must be ensured that the use of artificial intelligence does not create barriers for low-skilled workers in seeking employment. Moreover, the implementation of this technology should align with efforts to maintain a balance between high productivity and attention to workers’ welfare and capital policies,” she further elaborated.

The faculty member of the Faculty of Economics and Business also stated that the government must pay attention to market challenges arising from the adoption of artificial intelligence. The government must also take immediate steps to oversee and regulate its usage.

“The government also needs to provide training and skill development to workers to prepare them to face changes in the labor market caused by technological advancements such as artificial intelligence,” she concluded.

Author: Rosali Elvira Nurdiansyarani

Editor: Feri Fenoria

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