AI is already impacting the labor market, starting with young tech workers, Goldman economist says

Brendan McDermid | ReutersChanges to the American labor market brought on by the arrival of generative AI are already showing up in employment data, according to a Goldman Sachs economist.Most companies have yet to deploy artificial intelligence in duction cases, meaning that the overall job market hasn't yet been significantly impacted by AI, said Joseph Briggs, senior global economist of Goldman's re division, in a podcast episode d first with CNBC.But there are already signs of a hiring pullback in the nology sector, hitting younger employees there the hardest, Briggs said."If you look at the sector's employment trends, they've been basically growing as a of overall employment in a remarkably linear manner for the last 20 years," Briggs said on the episode of "Goldman Sachs Exchanges" to be aired Tuesday."Over the last three years, we've actually seen a pullback in hiring that has led it to undershoot its trend," he said

Generative AI models are quickly becoming adept at handling many routine tasks, and some experts say they are already on par with human software engineers, for instance.That has sparked concerns that while automation will make companies more ductive and enrich holders, swaths of the job market could be impacted in the coming years.nology executives have recently become more candid the impact of AI on employees

Companies including Alphabet and Microsoft have said AI is ducing roughly 30% of the code on some jects, and Salesforce CEO Marc Benioff said in June that AI handles as much as 50% of the work at his company.Young workers, whose jobs are the easiest to automate, are the first concrete signs of displacement, according to Briggs.Unemployment rates among workers between 20 and 30 years old jumped by 3 percentage points since the start of this year, he said

Briggs recently co-authored a report titled "Quantifying the Risks of AI-Related Job Displacement" that cites labor market data from IPUMS and Goldman Sachs Global Investment Re."This is a much larger increase than we've seen in the sector more broadly [and] a larger increase than we've seen for other young workers," he said.'Labor substitution'The apach from CEOs has been to hold off on hiring junior employees as they begin to deploy AI, said George Lee, the former nology banker who co-heads the Goldman Sachs Global Institute."How do I begin to line my enterprise so I can be more flexible and more adaptive... yet without harming our competitive edge?" Lee said in the podcast episode. "Young employees for this period of time are a little bit the casualty of that."Over time, roughly 6% to 7% of all workers could lose their jobs because of automation from AI in a baseline scenario, according to Briggs.The transition could be more painful, both to workers and the U.S. economy, if adoption among companies happens faster than the roughly decade-long period he assumes, Briggs said.That could either be because of nological advances or an economic slowdown that encourages companies to cut costs, he said.If AI reers achieve AGI, or artificial general intelligence, that equals a person's ability to learn and adapt across domains, instead of being narrowly deployed, the impact on workers would be more found, the Goldman economist said."Our analysis doesn't factor in the potential for the emergence of AGI," Briggs said. "It's hard to even start thinking the impact on the labor market, but I would guess there bably and undoubtedly is more room for labor substitution and a more disruptive impact in that world."