TLDR: A recent analysis by Goldman Sachs reveals that artificial intelligence is already significantly increasing unemployment among young tech workers. The jobless rate for tech professionals aged 20 to 30 has surged by nearly 3 percentage points since early 2024, a rate more than four times higher than the overall jobless rate. This trend is attributed to AI tools automating tasks traditionally performed by entry-level and junior staff, creating a bottleneck for new graduates entering the field.
Artificial intelligence is rapidly reshaping the labor market, with a new report from Goldman Sachs indicating a notable rise in unemployment specifically among young tech workers. According to the analysis, the jobless rate for individuals in the tech sector aged 20 to 30 has climbed by nearly 3 percentage points since early 2024. This increase is particularly stark when compared to the broader unemployment rate, which it has outpaced by more than four times.
Jan Hatzius, Goldman Sachs’ chief economist, noted that the tech sector’s share of the US employment market peaked in November 2022, coinciding with the launch of generative AI models like ChatGPT. Since then, the sector’s employment figures have fallen below their long-term trend. The report highlights that generative AI, capable of producing code and content at unprecedented speeds, is reducing the need for human intervention in routine operations, directly impacting roles traditionally held by early-career professionals.
This automation wave is creating a significant bottleneck for new graduates and young professionals seeking entry-level positions in tech. Tasks such as coding and data analysis, once foundational for junior staff, are increasingly being automated by AI tools. This shift means that firms can achieve greater efficiency with fewer human resources, often eliminating the very roles that served as crucial stepping stones for career advancement.
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Looking ahead, Goldman Sachs estimates that generative AI could eventually displace between 6% and 7% of all US workers over the next decade. While the firm forecasts that the peak unemployment impact will be a ‘manageable’ 0.5 percentage point, as other industries are expected to absorb many displaced workers, the global scale of potential job displacement is substantial, with some estimates suggesting up to 300 million jobs could be affected by 2027. The immediate toll on young tech workers underscores a critical juncture for the industry, emphasizing the growing importance of upskilling and continuous learning to adapt to an AI-driven economy.
