Goldman Sachs economist Joseph Briggs reports that artificial intelligence is already beginning to impact the U.S. labor market, with young tech workers experiencing the earliest signs of displacement. The data suggests that while most companies haven’t yet deployed AI in production at scale, the technology sector has already begun pulling back on hiring, particularly affecting workers between 20 and 30 years old whose jobs are most susceptible to automation.
What you should know: Tech sector employment has broken from its 20-year linear growth pattern, with hiring falling below trend over the past three years.
- Unemployment rates among tech workers aged 20-30 have jumped by 3 percentage points since the start of this year, according to Briggs’ research.
- This increase is significantly larger than what’s been observed in the broader tech sector or among other young workers in different industries.
- The pullback comes as generative AI models become increasingly capable of handling routine tasks, with some experts suggesting they’re already matching human software engineers in certain areas.
The big picture: Major technology companies are becoming more transparent about AI’s role in their operations, signaling a shift toward automation-driven productivity.
- Companies including Alphabet and Microsoft report that AI now produces roughly 30% of the code on some projects.
- Salesforce CEO Marc Benioff revealed in June that AI handles as much as 50% of the work at his company.
- Tech executives are strategically holding off on hiring junior employees as they begin deploying AI solutions, according to George Lee, co-head of the Goldman Sachs Global Institute.
Why this matters: The current displacement represents just the beginning of a potentially decade-long transition that could affect millions of workers.
- Briggs projects that roughly 6% to 7% of all workers could lose their jobs due to AI automation in a baseline scenario.
- The transition could become more painful if AI adoption accelerates beyond the roughly decade-long timeline he assumes, either due to technological breakthroughs or economic downturns that push companies to cut costs faster.
- If researchers achieve artificial general intelligence (AGI)—AI that can learn and adapt across different domains like humans—the labor market impact would be far more profound than current projections account for.
What they’re saying: Industry leaders acknowledge the human cost of AI-driven efficiency gains.
- “How do I begin to streamline my enterprise so I can be more flexible and more adaptive… yet without harming our competitive edge?” Lee said. “Young employees for this period of time are a little bit the casualty of that.”
- “Our analysis doesn’t factor in the potential for the emergence of AGI,” Briggs noted. “It’s hard to even start thinking about the impact on the labor market, but I would guess there probably and undoubtedly is more room for labor substitution and a more disruptive impact in that world.”
Key details: The research draws from comprehensive labor market data and represents one of the first concrete examinations of AI’s current employment effects.
- Briggs co-authored a report titled “Quantifying the Risks of AI-Related Job Displacement” using data from IPUMS, a research organization, and Goldman Sachs Global Investment Research.
- The analysis focuses on the period following ChatGPT’s November 2022 release, which sparked the current AI boom and contributed to Nvidia becoming the world’s most valuable company.
- Young tech workers are experiencing displacement first because their jobs involve routine tasks that are easiest to automate with current AI capabilities.
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