AI drives rising unemployment for young tech workers, per Goldman Sachs
Artificial intelligence is already exerting a notable influence on the employment landscape, particularly for young professionals in the technology sector, according to recent analysis from Goldman Sachs. The investment bank's research indicates that since early 2024, the unemployment rate among 20- to 30-year-olds in tech has climbed at a significantly faster pace compared to the overall jobless rate.
This trend is especially pronounced in industries highly sensitive to AI adoption, such as marketing, customer service centers, graphic design, search engines, and software development. In these areas, employment growth has seen a negative turn, and the technology industry's proportion of total employment has dipped below its long-term average. This corroborates real-world observations of AI affecting recent tech graduates' job prospects.
The impact appears to be hitting entry-level and white-collar roles disproportionately. Since the launch of advanced AI models like ChatGPT, entry-level job postings have plummeted by 32%, a decline that far surpasses the overall job market contraction of 21%. The unemployment rate for college graduates in the United States has recently risen to 5.8%, exceeding the national average for the first time in recent history, indicating a fundamental shift in labor market dynamics. Major tech companies like Microsoft and IBM have already implemented significant layoffs, with AI playing a role in automating tasks, including code development and human resources.
Despite these localized impacts, Goldman Sachs maintains a nuanced perspective on AI's broader effect on the labor market. The firm suggests that while AI's influence is evident in specific sectors, it is unlikely to trigger widespread, mass unemployment over the next decade. This outlook is partly attributed to the current low adoption rate of generative AI by most businesses, with only 9.3% of companies reportedly using it in production processes. Goldman Sachs' models project that at the current adoption pace, approximately 6% to 7% of jobs could be replaced by AI in the coming years, though this figure could range from 3% to 14% under different assumptions.
Crucially, the bank also highlights that AI-related technological innovations are expected to create a substantial number of new jobs, which could offset some of the roles displaced by automation. This aligns with the World Economic Forum's 2025 Future of Jobs Report, which forecasts a net growth of 78 million jobs globally between 2025 and 2030, with 170 million new jobs emerging even as 92 million are lost.
The evolving landscape necessitates a significant shift in required skills. Experts emphasize the growing demand for non-routine analytical and interpersonal abilities as routine tasks become automated. Consequently, upskilling and reskilling efforts are becoming paramount for workers to adapt and remain relevant in an AI-augmented workforce. Goldman Sachs' Chief Information Officer, Marco Argenti, envisions a "hybrid workforce" where humans and AI collaborate, with companies needing to reskill human managers to oversee these integrated teams. This could also lead to "AI layoffs" where more advanced AI tools replace older AI systems or even human roles if performance lags.
In essence, while AI is undoubtedly reshaping the employment market, particularly for younger tech workers and those in repetitive white-collar roles, the prevailing view suggests a transformation rather than a complete displacement. The challenge lies in adapting education and training to equip the workforce with the skills necessary to thrive alongside AI.