Goldman Sachs economist warns Gen Z tech workers are first on the chopping block as AI shows signs of shaking up the labor market

AI·Gen ZGoldman Sachs economist warns Gen Z workers are first on the chopping block as AI shows signs of shaking up the labor marketBy Sasha RogelbergBy Sasha RogelbergReporterSasha RogelbergReporterSasha Rogelberg is a reporter and former editorial fellow on the news desk at Fortune, covering retail and the intersection of and culture.SEE FULL BIO AI adoption in the labor market is having the greatest impact on Gen Z workers, according to one Goldman Sachs economist.Getty ImagesUnemployment among Gen Z workers in the sector has risen faster than those in the broader industry and young workers overall, according to Joseph Briggs, senior global economist of Goldman Sachs’ re division

In a recent podcast episode, Briggs warned young people in are the largest targets for workforce displacement as a result of AI

As artificial intelligence begins to jostle the labor market, it’s Gen Z workers who are at the greatest risk of being displaced by the nology, one Goldman Sachs economist warns

The unemployment rate for young people between 20 to 30 years old in the sector has increased by 3% since the beginning of the year, according to Joseph Briggs, senior global economist of Goldman Sachs’ re division. “This is a much larger increase than we’ve seen [in] the sector more broadly or a larger increase than we’ve seen for other young workers,” Briggs said in an episode of the bank’s “Goldman Sachs Exchanges” podcast that aired Tuesday

AI adoption in the workplace so far has been modest: 9% of companies have used the nology regularly for the duction of goods or services in the past two weeks, according to Goldman Sachs’ recent report, “Quantifying the Risks of AI-Related Job Displacement,” co-authored by Briggs

However, employment in the sector has dipped in the last few years, coinciding with the release of OpenAI’s ChatGPT—disrupting more than 20 years of consistent job growth in the industry

But while millennials were the learn-to-code generation, new-to-the-workforce Gen Z is striking out on jobs

Gen Z is feeling the pressure

Nearly half of Gen Z job hunters in the U.S. believe AI has reduced the value of their college degrees, according to an April World Economic Forum report. “The story is one where the overall impacts on young workers in the labor market, speaking from an aggregate perspective, is small,” Briggs said. “But if we start zeroing in and zooming in on these specific industries where we are seeing AI be used to drive efficiency gains, there are signs that headwinds are emerging there.” Gen Z’s broader employment woes More broadly, young people are entering into a job market that is “low-hiring, low-firing,” Briggs argued

In other words, while AI may be changing the labor landscape, Gen Z workers must also contend with a job market less friendly to new hires. “There’s been a lot of questions around the lagged hiring rates or the difficulties facing recent college graduates,” he said. “I’m sure that we all know people who have had trouble finding jobs or a harder time than they would have normally ing recent graduations.” Briggs said he is “definitely seeing these lower hiring rates for recent college grads.” The Federal Reserve of New York found last month that the unemployment rate among recent college grads increased to 5.5%, which is now roughly the same rate as young men who didn’t attend college

Brad DeLong, a fessor of economics at University of California, Berkeley, wrote in a recent Substack post that young people shouldn’t blame AI at all for their unemployment woes, but look to the litany of economic uncertainties—from trade wars to inflation—for reasons why they can’t get hired

As companies adopt a wait-and-see policy as they learn more the ramifications of President Donald Trump’s economic policies, they are not firing employees so much as just waiting to hire, DeLong argued

AI has meanwhile become a scapegoat for es conscious of their decisions to bide their time instead of expand, he said. “Blaming AI allows both policymakers and leaders to avoid grappling with deeper, structural issues—such as the mismatch between what colleges teach and what employers need, or the long-term stagnation in ductivity growth that has made firms more cautious expanding payrolls, or short run policy uncertainty,” DeLong wrote

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