Goldman Sachs has warned that Generation Z tech workers face unprecedented job displacement due to AI automation, with rising unemployment rates threatening career prospects and America’s innovation pipeline.

At a Glance

• Unemployment among tech workers aged 20–30 has risen three percentage points since early 2024
• Goldman Sachs economist Joseph Briggs calls young workers “first on the chopping block” for AI automation
• Entry-level positions involving routine technical tasks are being eliminated rapidly
• Companies are prioritizing experienced or AI-savvy hires over recent graduates
• More young Americans are leaving tech career paths for trade and vocational training

AI’s Entry-Level Impact

Goldman Sachs analysis shows AI adoption reshaping corporate hiring priorities, especially in technology sectors where automation now handles many tasks previously assigned to junior staff. While only about 9% of companies report regular AI use, the effect on entry-level hiring has been outsized. Briggs notes that younger workers, often in roles with repetitive coding, testing, or data management tasks, are disproportionately replaced.

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The shift undermines the traditional progression from academic training to junior roles that provide essential industry experience. Without these stepping-stone jobs, many new graduates are finding themselves locked out of the tech sector entirely.

Education Under Scrutiny

The trend has sparked criticism of the U.S. higher education system, which continues to promote costly degree programs while failing to adjust curricula to prepare students for AI-driven workplaces. As automation reshapes industry needs, skills in areas resistant to AI—such as certain trades, engineering specialties, and hands-on technical work—are becoming more valuable.

Rising student debt adds financial strain to graduates entering a job market that increasingly bypasses them. Some young workers are turning to apprenticeships and skilled trades as a more stable and cost-effective path, a shift that challenges long-standing assumptions about the value of a four-year degree for career advancement.

Long-Term Economic Concerns

Economists warn that the loss of entry-level opportunities could weaken the country’s ability to cultivate future innovators. By sidelining early-career talent, the tech sector risks narrowing its pipeline of fresh ideas and diverse perspectives, potentially slowing overall innovation.

The displacement also has macroeconomic implications: reduced earnings and spending power among young adults could dampen economic growth, especially in metropolitan areas dependent on technology-driven industries. Analysts suggest policy responses should include workforce retraining programs, updated educational requirements, and safeguards to ensure AI deployment does not permanently erode employment opportunities for younger generations.

Sources

Reuters
CNBC
Bloomberg