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Goldman Sachs Finds That AI Will Calcify The Job Market
Job cuts // Image by Kait Cunniff with DALL-E
A new study by Goldman Sachs found that the real AI disruption is no longer mass layoffs, but simply making it harder for those who have already lost their jobs to find new ones.
Why It Hurts: The job market is very strange right now — despite a booming economy, mass layoffs are everywhere, and job applications seem to go into a black hole. That’s making workers afraid to leave their current positions or do anything that could jeopardize their employment. For those already on the unemployment line, the ubiquity of AI integration in businesses is starting to feel like an existential threat.
Between The Roles: Goldman Sachs economist Pierfrancesco Mei wrote that today’s AI disruption looks similar to previous technological paradigm shifts, like the rise of automation and the personal computer.
In other words, a lot is changing.
Workers affected by AI-related layoffs last year are taking an average of a month longer to find new roles than they did a decade ago. About 10% are expected to remain unemployed after a year.
And for three-quarters of laid-off workers who did find jobs, they landed in roles with similar or greater AI exposure than their previous positions. Yikes.
The AI disruption is most damaging to workers over the age of 55. When they found new jobs, they typically had to accept 10% lower pay than their previous salaries.
Final Résumé: Recent college grads are already feeling the brunt of AI’s impact. The unemployment rate for this cohort was 5.4% last quarter, compared to 4% for the overall population. And that’s only half the story, because underemployment is even more prevalent — “about 42% of employed recent graduates held jobs that don’t require a degree,” according to Axios.
The Future: Eventually, AI could deliver on its promise of creating a new subset of jobs, but those jobs may require people to upskill now to take advantage of the openings.
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Today’s email was written by David Vendrell.
Edited by Nick Comney. Polled and Copy-edited by Kait Cunniff.
Published by Darline Salazar.
