Singapore President Tharman Shanmugaratnam Warns AI Risk to Employment Hits Fresh Graduates Hardest

AI Risk to Employment Emerges as Urgent Global Challenge

Singapore President Tharman Shanmugaratnam issued a stark warning about the AI risk to employment facing fresh graduates during the IMF and World Bank annual meetings in Bangkok on Monday1

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. Speaking to global policymakers, Shanmugaratnam emphasized that governments worldwide must urgently address how artificial intelligence is dampening job demand for those entering the workforce. The concern centers on what he described as a critical vulnerability in the employment ladder—the crucial first job upon graduation that traditionally serves as the entry point to professional careers.

Evidence Shows Declining Demand in AI-Exposed Sectors

The AI's immediate impact on employment is already visible and measurable, according to Shanmugaratnam. "There is a particular problem that we have to address very soon... and that is that, the first rung in employment, your first job upon graduation, is now seeing less demand," he stated at the meetings2

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. The evidence is particularly clear in AI-exposed sectors, where automation and intelligent systems are rapidly transforming traditional entry-level roles. This trend represents a fundamental shift in how organizations structure their workforce, with AI-driven employment challenges manifesting most acutely at the junior level where fresh graduates typically begin building their careers.

AI-Driven Disruptions Threaten Global Economic Balance

Beyond immediate job opportunities for fresh graduates, Shanmugaratnam highlighted a broader concern about long-term economic disparities. He warned that the world must avoid a scenario where a "new divergence" forms between developing economies and advanced economies due to AI-driven disruptions1

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. This potential split could exacerbate existing inequalities, with wealthier nations better positioned to adapt their workforces and education systems while developing nations struggle to compete. The challenge requires coordinated policy responses to ensure equitable growth across different economic contexts.

Immediate Action Required to Address Entry-Level Employment Crisis

The Singapore President's remarks underscore the urgency of developing comprehensive strategies to mitigate these AI-driven employment challenges. Without swift intervention, the shrinking availability of entry-level positions could have cascading effects on entire generations of workers. Fresh graduates risk being locked out of career pathways that previous generations relied upon to build skills and experience. This disruption to traditional employment patterns demands that governments, educational institutions, and private sector leaders collaborate on solutions that prepare young workers for an AI-transformed job market while ensuring that technological advancement doesn't leave developing economies further behind in the global competition for prosperity and opportunity.