Goldman studied where AI is squeezing labor markets. Here's what it found
Goldman Sachs research indicates that artificial intelligence is beginning to impact labor markets in developed economies, leading to slower job growth in highly exposed industries.
Intelligence analysis by Gemini 2.5 Flash
A Goldman Sachs report reveals that AI adoption is causing employment headwinds, particularly in sectors like call centers, software publishing, and consulting. The impact is more pronounced for entry-level workers, with job openings growth slowing since mid-2022 across major developed markets.
Imagine a smart computer brain, called AI, that can do some jobs people used to do. A big bank, Goldman Sachs, looked at where this AI is starting to take over. They found that jobs like answering phones in call centers or helping with computer programs are slowing down, especially for people just starting their first jobs. It's like the AI is doing some of the simpler tasks, so fewer new people are needed for those specific roles.
Analysis
Goldman Sachs' recent analysis provides a granular look into the early, yet discernible, effects of artificial intelligence on employment across developed economies. The investment bank's findings suggest that while AI adoption is widespread, its impact on labor markets is currently concentrated in specific industries and demographic segments. This research offers a critical perspective for understanding the evolving economic landscape and the structural changes AI is beginning to induce.
Call Centers
Among the industries most significantly affected by AI automation, call centers stand out as a prime example of visible employment pressures. Goldman's report highlights a sharp decline in employment within this sector, falling substantially below historical trends across several developed markets. For instance, the U.S. call center industry saw employment drop 39% below trend, Canada experienced a 33% reduction, and Germany recorded a 27% decrease.
This pattern strongly suggests that AI tools capable of automating customer service and support functions are already being widely implemented, leading to a direct reduction in the demand for human labor. The data from these specific countries underscores a broader trend where readily available AI solutions are quickly reshaping operational requirements and staffing levels in service-oriented industries.
Entry-Level Workers
The research further indicates that the impact of AI-related employment pressures is disproportionately felt by entry-level workers. Goldman Sachs analyzed employment growth across over 800 occupations and found that the strongest AI-related headwinds were concentrated among individuals just starting their careers. This suggests that tasks typically performed by new hires are often more susceptible to automation.
While the overall drag on annual headcount growth across the broader labor market due to a 10% occupational exposure to AI was relatively modest (e.g., 0.1 percentage point in France, Canada, and the U.S.), the effect on entry-level workers was significantly higher. In Australia, this impact exceeded 0.6 percentage points, and in the U.S., it was over 0.2 percentage points. This disparity highlights a growing challenge for new entrants to the workforce, who may find fewer opportunities in roles increasingly handled by AI systems.
15% to 20%
The observed labor market shifts coincide with a significant level of AI adoption already present across developed economies. Goldman's study, which aggregated data from 11 surveys, estimates that major developed markets have AI adoption rates ranging from approximately 15% to 20%. This widespread integration of AI technologies provides the context for the employment trends identified.
Countries like France, the U.S., the Netherlands, and the U.K. are noted as leaders in AI adoption, indicating a more advanced stage of technological integration into their economies. Conversely, Italy, Japan, and New Zealand are among those at the lower end of the adoption spectrum within developed nations. This variation in adoption rates across countries may contribute to the differing magnitudes of AI's labor market impact observed globally, suggesting that as adoption increases, so too might the associated employment pressures.
Key points
- Employment in call centers, software publishing, management consulting, and advertising services has fallen sharply below trend in developed markets.
- Entry-level workers are particularly vulnerable to AI's impact on employment, experiencing stronger headwinds than the broader labor market.
- AI adoption is already widespread across developed economies, with rates averaging 15% to 20%.
- The U.S., Canada, and Germany show significant employment declines in call centers due to AI automation.
- AI-related hiring pressures are visible globally but remain concentrated in a narrow set of industries and worker types.
The report suggests a realistic downside where AI adoption continues to displace entry-level workers and reduce job growth in specific industries, potentially leading to increased unemployment or underemployment for those with skills easily automated. This could exacerbate economic inequalities and necessitate significant workforce retraining initiatives to adapt to the evolving job market.
