GS economist sees AI displacing 15M US workers over a decade, but there's a catch

A Goldman Sachs economist expects artificial intelligence to displace more than 15 million US workers over the next decade, but argues that the resulting job losses are likely to be temporary as new occupations emerge and the economy adapts to technological change.

In a recent research report titled "An AI Job Apocalypse?", Goldman Sachs senior global economist Joseph Briggs estimated that more than 9% of the US labour force could be displaced during what he expects to be a 10-year AI transition period.

However, he maintained that historical experience suggests technological innovation ultimately creates more jobs than it destroys.

"Despite our expectation that AI-related job losses will lead to a meaningful amount of labor displacement, we continue to expect that labor market headwinds will be temporary. Key to this view is our expectation that over the long run AI will create many new jobs even as it destroys existing ones," Briggs wrote.

His assessment echoes comments made by Goldman Sachs Chief Executive David Solomon, who has argued that concerns about an AI-driven employment apocalypse are overstated because of the US economy's ability to adapt to technological disruption.

Historical evidence offers reassurance

Briggs said previous waves of innovation suggest that the labour market is capable of absorbing technological shocks, particularly when the transition unfolds over an extended period.

"As we’ve noted, technology has been a key driver of long-run job growth. About 60% of workers today are in occupations that didn’t exist in 1940, which account for 85% of the job growth since then," he said.

He argued that a decade-long AI transition would give workers, employers and policymakers time to adjust, allowing the economy to generate new opportunities alongside the disappearance of existing roles.

According to Briggs, the US labour market remains "incredibly dynamic", making it plausible that faster job creation could offset much of the disruption caused by AI.

"In a dynamic AI-enabled economy, it is quite plausible that a moderate step-up in the pace of job creation will boost gross job gains enough to absorb most AI-related job losses and mitigate the labor market hit from AI disruption," he said.

AI expected to create new categories of work

Goldman Sachs outlined several ways in which AI could generate employment over time.

The report said technology has historically created entirely new occupations, pointing to nearly 15 million jobs linked to the emergence of the digital economy.

It also noted that technological progress enables greater specialization.

Briggs cited healthcare employment, which has expanded from roughly 2 million workers to more than 18 million over the past six decades, as an example of technology supporting new specialized roles.

In addition, higher incomes generated by productivity improvements can stimulate demand for discretionary services that create employment.

Industries such as pet care, nail salons, educational support and athletic coaching have grown rapidly in recent decades despite being technologically feasible long before they expanded.

Layoffs linked to AI continue to rise

Goldman Sachs' relatively optimistic long-term outlook comes as AI is increasingly cited as a driver of corporate layoffs.

According to the latest report from Challenger, Gray & Christmas, employers announced 45,849 job cuts in June, down 53% from May.

However, artificial intelligence remained the leading reason for workforce reductions for a fourth consecutive month.

Companies attributed 14,029 announced job cuts in June to AI, accounting for about 31% of all layoffs during the month.

So far this year, AI has been cited in 101,743 job-cut announcements, representing approximately 23% of all announced reductions.

Since Challenger began tracking AI-related layoffs separately in 2023, the technology has been linked to 173,568 announced job cuts.

Several major technology companies have acknowledged AI as one factor behind recent workforce restructuring.

In April, Meta Chief Executive Mark Zuckerberg described AI as "the most consequential technology of our lifetimes" while discussing the company's decision to eliminate thousands of jobs.

Meta, Coinbase and Block have each reduced their workforces by at least 10% in recent months while pointing to AI adoption as part of broader restructuring efforts.

Risks remain despite optimistic outlook

While Briggs expects the labour market to adjust over time, he acknowledged that the transition could still prove disruptive.

One risk is that AI-related job losses could become concentrated within a shorter timeframe than anticipated, leading to a sharper rise in unemployment.

"First, even if our updated estimate that the AI transition will displace over 9% of workers is correct, the job losses could be concentrated over a shorter period, resulting in a notably larger rise in the unemployment rate," he said.

He noted that declines in routine occupations have historically accelerated during recessions, when weaker economic conditions limit the creation of replacement jobs.

Briggs also acknowledged a broader uncertainty surrounding AI's long-term impact on employment.

"The second more existential risk is that 'this time is different' and AI is fundamentally a more labor-replacing technology than those that inform our historical analysis," he said.

"That said, the answer to 'is this time different?' will be hard to prove or disprove until the labor market holds up or doesn’t in the coming years. So, the debate around this question will remain lively for the foreseeable future."