Joseph Briggs, a senior economist at Goldman Sachs, recently highlighted concerning trends in the job market for young tech workers. According to him, those in the 20 to 30 age bracket are seeing a troubling uptick in unemployment, specifically a 3% rise just this year.
In a podcast episode on the “Goldman Sachs Exchanges” podcast, he expressed alarm that the youngest tech employees are becoming prime targets for job cuts as artificial intelligence alters the work landscape.
Although the adoption of AI in workplaces has been slow—only about 9% of companies incorporated it in the last couple of weeks—a Bumble report suggests the changes brought on by platforms like OpenAI’s ChatGPT are upending a two-decade streak of job growth in the technology field.
Goldman Sachs projects that the ongoing rise in AI technology could displace anywhere from 6% to 7% of the total workforce. Tech giants such as Microsoft, Google, and Meta have already laid off nearly 30,000 employees collectively as they pivot towards AI investments. This not only puts Gen Z job seekers in the lurch but also signifies a broader struggle, with entry-level job listings crashing by about 35% since the start of 2023.
The anxiety among Gen Z workers is palpable; a recent survey found that nearly half feel that AI has devalued their college degrees, as reported by the World Economic Forum.
Briggs elaborated that the overall impact of job trends on young workers might seem negligible from a wider standpoint. Still, when focusing on industries quickly adopting AI to enhance productivity, there are notable signs of trouble brewing for entry-level employees.
Broader Employment Challenges for Gen Z
The job market landscape for young people isn’t looking great—a balance of low hiring and low firing is creating challenges for those entering the workforce. Briggs noted that while AI may be an influencing factor, Gen Z must also navigate a labor market that isn’t overly accommodating to newcomers.
According to him, the difficulties faced by new graduates are becoming increasingly evident. The Federal Reserve of New York revealed last month that unemployment for recent college grads has jumped to about 5.5%, placing them in the same bracket as young men who didn’t attend college. For all workers aged 22 to 27, the unemployment rate is 6.9%.
Sometimes, the blame placed on AI can distract from deeper economic concerns, suggests Brad DeLong, an economics professor at UC Berkeley. In a recent blog post, he advised young individuals to focus less on AI and more on economic uncertainties like trade issues and inflation that can hinder their job search.
DeLong pointed out that companies are hesitant to hire right now; they are more inclined to wait and see how policies, particularly those from the previous presidency, unfold. He views the fixation on AI as a way for business leaders and policymakers to sidestep larger structural problems, like the disconnect between educational outcomes and employers’ needs or stagnant productivity growth.
This analysis first appeared on Fortune.com.
