Goldman Sachs Adjusts Projections on AI-Induced Workforce Displacement
Goldman Sachs has revised its projections regarding the potential impact of generative artificial intelligence on the U.S. labor market.
The investment bank now anticipates that over 9% of the workforce—approximately 15 million individuals—could face displacement as the integration of AI technologies accelerates over the next decade.
This updated forecast, articulated by economist Joseph Briggs, reflects a significant increase from an earlier estimation that suggested AI would affect only 6% to 7% of U.S. employees.
The adjustment stems from a novel methodology that gauges the aggregate departure of workers from their current roles due to enhanced productivity, rather than merely accounting for the number of unemployed individuals at any given moment.
The analysis indicates that historically, a 1% rise in productivity attributed to technological innovations correlates with an uptick in job destruction rates by approximately 0.5 to 0.6 percentage points over the subsequent two years.
While many displaced workers eventually secure new positions or exit the labor force, this phenomenon tends to obscure the overall disruption within the workforce, thereby limiting the visible impact on unemployment rates.
Goldman Sachs draws parallels with the information and communications technology boom of the late 1990s and early 2000s, suggesting it serves as a pertinent historical reference.
During this era, productivity surges were associated with higher rates of job loss, particularly affecting routine positions.
The report further indicates that technology-induced workforce reductions often escalate during economic downturns, a time when businesses find it increasingly difficult to reabsorb displaced employees into new roles.
Despite the elevated estimates of displacement, Goldman Sachs insists that the long-term economic benefits of AI are projected to surpass the short-term upheavals.
The firm notes that the U.S. economy typically generates between 25 million and 35 million new jobs each year and anticipates that artificial intelligence will foster new employment opportunities through the emergence of novel professions, heightened specialization, and increased demand for consumer services propelled by productivity-induced income growth.
Should AI adoption proceed over a decade and most displaced workers find new employment within a year, Briggs posits that this technological advancement could raise the U.S. unemployment rate by less than one percentage point at its peak.
He characterizes this potential increase as significant yet manageable when contextualized within the historical landscape of technological evolution in the economy.
Source link: Citybiz.co.
