AI is already driving up unemployment among young tech workers, according to Goldman Sachs

The rise of artificial intelligence is significantly transforming the landscape of the US job market, with younger tech professionals bearing the brunt of these changes. According to a recent analysis by Goldman Sachs, AI's presence is becoming increasingly evident in employment statistics, particularly since the launch of ChatGPT in November 2022. Goldman's chief economist, Jan Hatzius, noted that the tech sector's share of employment peaked at that time but has since dipped below its historical average. This downturn has had a pronounced effect on younger workers in technology, with unemployment for those aged 20 to 30 climbing nearly 3 percentage points since early 2024. This increase is more than four times the rise in the overall unemployment rate, indicating that generative AI is beginning to displace jobs, particularly for those just starting their careers. While generative AI currently represents a small fraction of the overall labor market, Goldman Sachs predicts that it could displace around 6-7% of all US jobs over the next decade. However, the firm forecasts that the peak impact on unemployment will be contained to a manageable increase of 0.5 percentage points, as other sectors are expected to absorb many of those affected. This report arrives in the context of growing anxiety surrounding the health of the US labor market. Recent data from the Bureau of Labor Statistics revealed that the economy added only 73,000 jobs in July, falling short of the 106,000 anticipated by economists. Additionally, job growth for May and June has been revised downward. Hatzius emphasized that these job statistics suggest that US economic growth is faltering, operating at a pace that could lead to further labor market weaknesses. He also pointed to a slowdown in GDP growth, attributing some of this stagnation to increased tariffs. Analysts predict that the sluggish growth will persist, with Goldman estimating a 1.2% annualized growth rate in real GDP for the first half of the year. Moving forward, they expect similar rates in the latter half, despite some positive indicators such as improved business confidence and easing financial conditions. However, concerns remain about slow growth in real disposable income and consumer spending, which they link to both job market challenges and the anticipated impact of tariffs on consumer prices. The tech industry is on high alert regarding the potential impact of AI on employment. In a stark warning, Anthropic's CEO Dario Amodei suggested that AI could eliminate up to 50% of entry-level, white-collar jobs within the next five years.