Goldman Sachs Warns AI Is Already Displacing Young Tech Workers

Goldman Sachs (NYSE:GS) has highlighted the impact of artificial intelligence (AI) on the job market, especially affecting young tech workers.

What Happened: The tech sector’s share of the US employment market peaked in November 2022, coinciding with the launch of ChatGPT, an AI language model. Since then, it has fallen below its long-term trend, as per a note by Jan Hatzius, Goldman Sachs’ chief economist, on Monday, reported Business Insider.

The impact has been particularly severe for young tech workers, with the unemployment rate for 20- to 30-year-olds in tech rising by nearly 3 percentage points since early 2024.

This is over four times the increase in the overall jobless rate. The rise in unemployment among young tech workers is seen as a clear indication that generative AI is starting to displace white-collar jobs, particularly among early-career workers.

See Also: Palantir Q2 Earnings: Revenue, EPS Beat Estimates, Company Raises Guidance Citing ‘Astonishing Impact’ Of AI Leverage

Goldman Sachs estimates that generative AI will eventually displace 6-7% of all US workers, a shift expected to occur over the next decade. The firm forecasts that the peak unemployment impact will be limited to a “manageable” 0.5 percentage point, as other industries absorb many displaced workers.

Why It Matters: The impact of AI on the job market has been a topic of concern for some time. In a recent development, Bill Gates warned that AI is advancing at a pace that “surprises” even him, creating uncertainty about when AI might replace human workers across industries.

Earlier, on July 17, Cathie Wood of ARK Invest also raised concerns about the impact of AI on the job market, especially for new college graduates. She pointed to troubling labor market trends, citing The Wall Street Journal’s reporting on new grads struggling to land jobs.

However, not everyone shares these concerns. David Sacks, the White House AI and crypto czar, and Balaji Srinivasan, a Silicon Valley investor, have argued that the narrative of AI-driven job displacement is overhyped. They say that humans remain essential, guiding and verifying AI at both ends of the workflow. 

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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