Goldman Finds Entry-Level Workers More Vulnerable to AI Displacement

Goldman Sachs research indicates that entry-level workers in industries with higher artificial intelligence (AI) exposure may face increased displacement risks. The report, "Global Economics Comment: Is AI Impacting Global Labor Markets?", published on August 19, highlights that sectors experiencing significant AI automation have seen slower job openings growth since late 2022.

This trend is particularly pronounced in Germany, Australia, and the U.S., with the banking giant attributing it to companies reevaluating their hiring strategies in light of generative AI tools.

Goldman's findings suggest that employment in information and communication service industries has lagged due to AI, with certain sectors experiencing sharp declines below trend. For instance, call centers in the U.S. have dropped by 39% compared to trend, 33% in Canada, and 27% in Germany. While the global impact of AI on labor markets is evident, the report notes that its effects are most compelling in the U.S.

Moreover, the research indicates that recent anecdotes and U.S. labor market data suggest that AI displacement could disproportionately affect entry-level employees. Goldman's analysis confirms that AI-related hiring headwinds are evident in official and unofficial employment data, though they primarily impact specific industries and workers.

PYMNTS Intelligence, a separate research firm, also examined the impact of AI on "Labor Economy" workers, defined as those earning up to $25 per hour and typically earning less than $50,000 per year. Their study, "The Resilience Deficit: Labor Workers in an Automated Economy," found that AI is invading various industries, with 37% of these employees reporting that their companies have adopted new AI or automation tools in the past year.

However, the research also reveals that lower-income employees are receiving less training, expressing less confidence, and have fewer financial resources to cope with potential disruption.

The findings further suggest that AI's impact is expanding beyond traditional tech hubs like Silicon Valley, spreading into sectors such as warehousing, restaurants, hospitality, logistics, and caregiving jobs that significantly contribute to everyday consumer spending.