AI Cuts 16,000 U.S. Jobs Monthly, Impacting Gen Z Most: Goldman Sachs
Goldman Sachs recently published a report highlighting the impact of artificial intelligence (AI) on the U.S. job market. The research indicates that AI has been responsible for the loss of approximately 16,000 net jobs per month over the past year. Gen Z and entry-level workers are reportedly the most affected demographic.
AI’s Dual Effect on Employment
The findings present a nuanced view of AI’s role in the workforce. According to Goldman Sachs economists, AI substitution has resulted in the elimination of around 25,000 jobs per month, while AI augmentation has contributed about 9,000 jobs. This creates a net loss, indicating that AI is primarily replacing human labor rather than complementing it.
Understanding Substitution and Augmentation
The analysis distinguishes between two significant effects of AI:
- Substitution: AI takes over tasks traditionally performed by humans.
- Augmentation: AI enhances human productivity but does not fully replace it.
Jobs with high substitution risk include roles like insurance claims clerks and bill collectors. Conversely, occupations like lawyers and physicians, which require unique human skills, score higher on augmentation potential.
Gen Z: The Most Affected Generation
The report reveals a troubling trend: the unemployment rate for entry-level workers under 30 years old is widening in comparison to their more experienced counterparts, aged 31 to 50. This shift has led to a notable increase in the wage gap between these two groups.
Impact on Wages
Goldman Sachs’ regression analysis estimates that the wage gap increases by about 3.3 percentage points with every standard deviation in AI substitution exposure. This is particularly concerning for Gen Z, who predominantly occupy routine jobs in data entry, customer service, and legal support—all vulnerable to automation.
Looking Ahead: The Future with AI
While the report underscores job losses, it also suggests that the overall impact of AI may be less severe than estimated. Goldman Sachs points out that the hiring boom associated with AI investments in infrastructure is not fully accounted for in their analysis.
Interestingly, Gen Z is also the generation best equipped to leverage AI tools. They are more likely to engage with AI-driven systems and initiatives, which may help them adapt to the evolving job landscape despite initial losses.
Conclusion
Overall, the landscape of U.S. employment is changing due to AI. While new opportunities will arise, they may require different skills and take time to materialize. For Gen Z, the challenge lies in navigating these shifts and finding ways to capitalize on their familiarity with technology.
