AI is cutting 16,000 U.S. jobs a month—and Gen Z is taking the brunt, Goldman Sachs says

AI is cutting 16,000 U.S. jobs a month—and Gen Z is taking the brunt, Goldman Sachs says

In a recent study, Goldman Sachs economists have found that AI is significantly impacting the U.S. job market, with younger, entry-level workers bearing the brunt of the labor market disruption. Over the past year, AI has erased approximately 16,000 net jobs per month, with the effects felt most acutely by Gen Z and entry-level workers. This research represents one of the most detailed analyses to date of AI's dual impact on employment: substitution, where AI replaces human workers, and augmentation, where AI enhances productivity and may even expand hiring.

Goldman Sachs economists combined standard AI exposure scores with a complementarity index developed by IMF economists to create a new framework for assessing the risks and opportunities posed by AI. Under this model, occupations are evaluated based on their exposure to substitution and augmentation. Occupations that score high on substitution risk are those where AI can handle most of the core tasks, such as insurance claims clerks and bill collectors. In contrast, occupations that score high on augmentation potential are those where AI can handle some tasks, but human judgment, physical presence, or specialized expertise remain essential, such as lawyers, construction managers, and physicians.

The study reveals that in occupations most exposed to AI substitution, the unemployment rate gap between entry-level workers (those under 30) and experienced workers (ages 31–50) has widened sharply compared to pre-pandemic averages. This disparity is not limited to unemployment rates; the wage gap has also deteriorated. Goldman Sachs' regression analysis estimates that a one standard-deviation increase in AI substitution exposure widens the entry-level-to-experienced wage gap by roughly 3.3 percentage points.

This dynamic highlights a structural vulnerability inherent in how young people enter the workforce. Gen Z workers are disproportionately concentrated in routine, white-collar, and administrative roles, such as data entry, customer service, legal support, and billing, which are the types of jobs most at risk from AI substitution. As a result, Gen Z workers are facing higher unemployment rates and narrower wage growth prospects compared to their more experienced counterparts.

The study also underscores the importance of reskilling and upskilling initiatives to help workers adapt to the changing job market. By investing in education and training programs that focus on developing skills that are less susceptible to automation, such as critical thinking, creativity, and interpersonal communication, the U.S. can mitigate the negative impacts of AI on employment and ensure a more equitable transition to an AI-driven economy.

In conclusion, the research from Goldman Sachs serves as a stark warning about the potential consequences of AI on the U.S. labor market, particularly for younger, entry-level workers. As AI continues to evolve and reshape industries, policymakers, businesses, and individuals must work together to address the challenges posed by automation and ensure that the benefits of technological advancement are shared equitably across all segments of society.