Goldman Sachs Economist: Gen Z Tech The workers are the most affected by the undulation of the AI labor market

The unemployment rate of young people aged 20 to 30 in the technological sector has increased by around 3% since the start of the year, according to Joseph Briggs, world economist in the research division of Goldman Sachs.

“This is a much greater increase than what we have seen (in) the technological sector more broadly or a greater increase than what we have seen for other young workers,” said Briggs in an episode of the Podcast “Goldman Sachs Exchanges” of the bank that broadcast on Tuesday.

The adoption of the AI at the workplace has so far been modest: around 9% of companies have regularly used technology for the production of goods or services in the last two weeks, according to the recent report by Goldman Sachs, “quantification of the risk of professional travel linked to AI”, co-written by Briggs. However, employment in the technology sector has declined in recent years, coinciding with the publication of the OpenAi chatgpt, which precedes more than 20 years of coherent growth in industry.

The bank predicts that the AI will move around 6 to 7% of the total workforce.

The proliferation of the adoption of AI is necessarily to have a disproportionate impact on the technology industry, Microsoft, Google, Meta and other technology giants collectively release nearly 30,000 workers while they transfer investments to AI. But while millennials were the learning generation, the work generation, the Z generation of the new work is based on technological jobs. Beyond harmful technology opportunities, the rise in automation also disrupts the entry level positions in particular, with entry-level work publications in the United States by decreasing by around 35% since January 2023.

Generation Z feels the pressure. In the United States, almost half of generation Z job hunters believe that AI has reduced the value of their university degrees, according to an April report from the World Economic Forum.

“History is that where the global effects on young workers on the job market, speaking from a global point of view, is small,” said Briggs. “But if we start to zero and zoom in on these specific industries where we see AI be used to generate efficiency gains, there are signs that the winds appear there.”

Wider employment problems of Gen Z

More broadly, young people enter a labor market which is “at a low pace and for low intention,” explained Briggs. In other words, while AI can change the landscape of work, workers of generation Z must also face a less friendly labor market for new hires.

“There have been a lot of questions around late hiring rates or the difficulties faced by recent university graduates,” he said. “I am sure that we all know people who have had trouble finding a job or more harm than they would have normally followed it for recent graduates.”

Briggs said that he “permanently saw these lower hiring rates for recent university graduates”. The New York Federal Reserve noted last month that the unemployment rate among recent university graduates had increased to around 5.5%, which is now about the same rate as young men who have not attended university. For all young workers aged 22 to 27, the unemployment rate is 6.9%.

Brad Delong, professor of economics at the University of California in Berkeley, wrote in a recent subordinate article that young people should not blame the AI for their unemployment misfortunes, but turn to the litany of economic uncertainties – from commercial wars to inflation – for the reasons for which they cannot be hired.

While companies adopt a waiting policy because they learn more about the ramifications of President Donald Trump’s economic policies, they do not dismiss the employees she was simply waiting to hire, Delong said. The AI has meanwhile become a scapegoat for companies aware of their decisions to wait for their time instead of developing, he said.

“The blame of AI allows political decision -makers and business leaders to avoid taking with deeper structural problems, such as the inadequacy between what colleges teach and what employers need, or the long -term stagnation of the growth of productivity which has made companies more cautious to the widening of payroll, or to the short -term uncertainty.”