AI is already driving up unemployment among young tech workers: Report
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Goldman Sachs warns that generative AI is displacing US tech jobs, with young workers hit hardest as unemployment rises and job growth slows across the economy.
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OpenAI's ChatGPT app is displayed on an iPhone in New York, on May 18, 2023. (AP)
Artificial intelligence is beginning to visibly reshape the US labor landscape, with early signs pointing to rising unemployment, especially among young professionals in the tech sector. "It is true that AI is starting to show up more clearly in the data," wrote Jan Hatzius, chief economist at Goldman Sachs, in a note released Monday.
According to Goldman Sachs’ analysis, the tech sector's share of US employment peaked in November 2022, coinciding with the launch of ChatGPT, and has since fallen below its long-term trend.
The impact is hitting young workers hardest. The unemployment rate for tech employees aged 20 to 30 has risen by nearly 3% points since early 2024, more than four times the increase in the overall national jobless rate.
That spike, analysts suggest, is a clear sign that generative AI is starting to displace white-collar workers, particularly those in early-career roles. "While this is still a small share of the overall US labor market, we estimate that generative AI will eventually displace 6–7% of all US workers," Hatzius noted.
Goldman Sachs forecasts that this structural shift will play out gradually over the next decade. At its peak, the unemployment effect is expected to add a "manageable" 0.5 percentage point to the overall jobless rate, as displaced workers transition into other sectors.
Despite the long-term outlook, some tech leaders are sounding more urgent warnings. In May, Anthropic CEO Dario Amodei predicted that AI could eliminate 50% of entry-level white-collar jobs within just five years.
Broader signs of labor market weakness
The Goldman Sachs report arrives amid growing concerns about overall labor market fragility. The US economy added just 73,000 jobs in July, well below the 106,000 forecast by economists, according to Bureau of Labor Statistics data released Friday.
Revisions for May and June were also sharply lower, reinforcing Goldman’s view that “US growth is near stall speed, a pace below which the labor market weakens in a self-reinforcing fashion,” Hatzius wrote.
While AI continues to drive long-term disruption, Goldman identified a more immediate challenge: slowing output growth. The firm estimates that real GDP grew at a 1.2% annualized rate in the first half of the year and projects a similarly sluggish pace in the second half.
Although easing financial conditions and improved business confidence could support modest growth, the firm expects real disposable income and consumer spending to remain weak. Tariffs are also expected to continue weighing on prices and purchasing power.
“Most of the pass-through from tariffs to consumer prices is still ahead of us,” Hatzius warned, adding that the combination of soft job growth and rising costs could further constrain consumer activity.
