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Brendan McDermid | Reuters
According to Goldman Sachs Economist, changes in the US labor market brought about by the arrival of generative AI have already appeared in employment data.
As most companies still don’t deploy artificial intelligence in the case of production, Joseph Briggs, senior global economist in Goldman’s research division, said in a podcast episode shared with CNBC that the entire AI job market has not yet been significantly affected.
But there were already signs of a job retraction in the technology sector, and it hit the young employees the most difficult there, Briggs said.
“Looking at employment trends in the tech sector, they have essentially grown as a share of overall employment in a remarkably linear way over the past 20 years,” Briggs said in an episode of “Goldman Sachs Exchange,” airing Tuesday. “In the last three years, we have actually seen a backlash in high-tech adoption.
Since its release in November 2022, Openai’s ChatGPT has fueled the rise of Nvidia, the world’s most valuable company, and has the industry compete for its meaning. Genetic AI models are quickly familiar with handling many everyday tasks, and some experts say they are already comparable to human software engineers, for example.
It sparked concern that automation could have an impact on the job market belt in the coming years while making businesses more productive and enriching shareholders.
Technology executives have recently become more open-minded about the impact of AI on employees. Companies including Alphabet and Microsoft have said that AI produces around 30% of the code on several projects, and Salesforce CEO Marc Benioff said in June that AI handles 50% of his company’s work.
According to Briggs, the young tech workers whose jobs are the easiest to automate are the first concrete signs of displacement.
Unemployment rate for high-tech workers between the ages of 20 and 30 has increased by 3 percentage points since its launch this year, he said. Briggs recently co-authored a report entitled “Quantification of the Risk of AI-Related Job Displacement,” citing labor market data from IPUMS and Goldman Sachs Global Investment Research.
“This is a much larger increase than we saw more widely in the tech sector. [and] It’s a much larger increase than we’ve seen in other younger workers,” he said.
“Work alternative”
George Lee, a former technology banker who co-heads the Goldman Sachs Global Institute, said Tech CEO’s approach was to refrain from hiring junior employees when it began deploying AI.
“How can we start streamlining our companies to make them more flexible and adaptable…without losing competitiveness yet?” Lee said in an episode of the podcast. “Young employees during this period are their victims.”
Over time, about 6% to 7% of all workers could lose their jobs due to automation from AI, according to Briggs.
If inter-business adoption occurs faster than the roughly 10-year period he envisions, the transition can be more painful for both workers and the US economy, Briggs said.
It could be due to technological advancements or slowing the economy that encourages businesses to cut costs, he said.
If AI researchers achieve AGI, or artificial general information, it would have a deeper impact on workers rather than being narrowly deployed, equal to the ability of those to learn and adapt across the domain.
“Our analysis does not take into account the possibility of AGIs appearing,” Briggs said. “It’s hard to even begin thinking about the impact on the labour market, but perhaps and certainly, I think there’s more room for labor replacement in that world and there’s more destructive impact.”
