AI is impacting the labor market, young tech workers: Goldman economist
Generative AI is starting to make its mark on the American labor market, with changes already becoming evident in employment data. According to a senior global economist at Goldman Sachs, Joseph Briggs, most companies have not yet fully implemented artificial intelligence in their operations, so the overall job market has not been significantly affected by AI. However, there are signs of a hiring slowdown in the technology sector, particularly impacting younger employees.
Briggs noted that tech sector employment had been steadily increasing for the past 20 years but experienced a pullback in hiring over the last three years, falling below its trend. The emergence of OpenAI’s ChatGPT in November 2022 has propelled Nvidia to become the world’s most valuable company and has forced industries to confront the implications of generative AI. These AI models are becoming increasingly proficient at handling routine tasks and are even being compared to human software engineers.
Concerns have been raised about the potential impact of automation on the job market, with fears that while companies may become more productive and profitable, large portions of the workforce could be displaced in the coming years. Technology executives, including those at Alphabet, Microsoft, and Salesforce, have acknowledged that AI is already responsible for a significant portion of code generation and work within their organizations.
Briggs highlighted that young tech workers are the first to feel the effects of automation, with unemployment rates among tech workers aged 20 to 30 increasing by 3 percentage points since the beginning of the year. A report co-authored by Briggs titled “Quantifying the Risks of AI-Related Job Displacement” analyzed labor market data to assess the impact of AI on employment.
Tech CEOs have been cautious about hiring junior employees as they implement AI technologies to streamline their operations and maintain competitiveness. Briggs estimated that in a baseline scenario, 6% to 7% of all workers could lose their jobs due to automation by AI. However, if adoption of AI accelerates or if AGI (artificial general intelligence) is achieved, the impact on workers and the economy could be more severe.
Briggs emphasized that the potential emergence of AGI could lead to even greater labor substitution and disruption in the job market. While current analyses do not account for the impact of AGI, the implications could be significant. The future of work is evolving rapidly, driven by advancements in AI technology that have the potential to reshape industries and workforce dynamics.
