Goldman Sachs Exchanges

AI Exchanges: AI’s Impact on Employment

Joseph Briggs, Head, Global Economics team, Goldman
Sachs Research
Allison Nathan, Senior Strategist, Goldman Sachs
Research
George Lee, Co-Head, Goldman Sachs Global Institute,
Date of Recording: July 31, 2025

Allison Nathan: Welcome to Goldman Sachs Exchanges.

I'm Allison Nathan and I'm here with George Lee, co-head
of the Goldman Sachs Global Institute. Together, we're co-
hosting a series of episodes exploring the rise of AI and
everything it could mean for companies, investors, and
economies.

George, great to see you again.

George Lee: You too, Allison. Thank you.

Allison Nathan: So George, today we're discussing one of

the biggest anxieties, I would say, about the rise of AI,
which is the impact on jobs. I would say even prior to the

1
amazing advances in the technology that we've seen over
the last few years and that you and I have discussed a lot
on this podcast, there have been a lot of questions about
the extent to which AI will ultimately replace workers and,
if that happens to a large extent, what industries, what
roles will be most impacted? It's now been almost three
years, though, since we've seen the launch of ChatGPT,
which is very hard to believe. I think you'd agree with me.

George Lee: Fascinating. Time flies when you're

having fun.

Allison Nathan: But that means that we're actually

beginning to see some hard data that I think could finally
reveal some questions or at least start to reveal some
answers to these questions. So to that end, I'm excited to
welcome my colleague from Goldman Investment Research,
Joseph Briggs, who leads our global economics research.
He's done some really truly informative and formative work,
I would say, on the economic implications of AI more
broadly and certainly on this topic. Joseph, thanks for
joining us.

Joseph Briggs: Great to be here, Allison. Great to

2
be here, George.

Allison Nathan: And so, Joseph, before we just dive into

all the details, as I just said, we've talked a lot about the
advances of the technology. It's come a long way in the last
few years. But I think we'd all agree that the adoption is
still pretty early. So is it too early to see tangible signs on
the labor market?

Joseph Briggs: Yeah, so when we look at adoption, we're

currently tracking about 9% of companies in the US using
AI for regular production. Now, this number is probably a
little bit lower than some of the more eye-popping adoption
rates that get picked up in the media, but the definition
that we're using when we say 9% is regular production for
goods and services over the last two weeks. And I think
this is the right definition to keep in mind because it's
really what is going to be necessary. Companies using AI
in regular production to drive significant productivity
impact.

Now, given that adoption rates are only at 9%, it's not too
surprising that we haven't seen a large impact or really any
sort of meaningful impact in the overall labor market data

3
yet. We have seen adoption pick up in sectors that are
more exposed to AI. There's actually a very positive
correlation between the exposure scores we constructed
over two years ago and who's using AI today. But if we
relate those to labor market slack indicators, things like
unemployment rates, job finding rates, layoff rates, average
hourly earnings, hours worked per week, there's really no
sort of meaningful correlation. And so when I look at the
impact that AI has had on the overall labor market data so
far, it looks pretty small to me.

George Lee: Fascinating. I was struck by the 9% number.

It feels lower than my intuition. I believe actually that
number, though, if you weight it by employment, it's
slightly higher. Is that right?

Joseph Briggs: Yes, absolutely. If we look at large

companies, you know, those with more than 250 workers,
these are those that have the in-house technological
expertise that can really develop the AI tools on their own.
Adoption rates there have gotten up into the mid to high
teens. It's the small companies sort of really waiting for the
plug-and-play solutions that we haven't seen adoption pick
up in any meaningful way yet.

4
George Lee: That's great. And if you think about
industries, what industries have been most affected thus
far?

Joseph Briggs: Definitely the tech sector. You know,

one of the things that we flagged in our most recent report
is that, if you look at the tech sector's employment trends,
they've been basically growing as a share of overall
employment in a remarkably linear manner for the last 20
years. Over the last three years, we've actually seen a
pullback in tech hiring that has led it to undershoot its
trend. And so this is telling us that in the tech sector,
which I think is the one that has gotten the most attention
in terms of leading the way for AI adoption, there has been
some meaningful headwinds to hiring and job growth.

There's other sectors as well. Finance is an area that is

showing pickup in adoption rates. Education is showing
pickup in adoption rates. Business services more broadly.
You know, anything exposed to content generation. But
even within these sectors, the adoption rates are still
relatively low.
Allison Nathan: On the tech side in particular, while

5
you're seeing some impact in terms of efficiency gains, are
you not hiring a lot of AI engineers? I mean, does that
show up at all in the numbers?

Joseph Briggs: Yeah, so we've definitely seen a pickup

in job postings that are mentioning AI. I think they've
increased by 25-50% in our latest AI adoption tracker.
This is relative to other job postings. And so companies are
trying to hire workers that have the expertise to build out
the capabilities and the tools to unlock the productivity
gains that we think are possible. You know, it's just that
this is a very small share of the overall economy, a very
small share of the overall labor market. We're still in the
very early days in seeing it being distributed and the
productivity and employment benefits of AI being
distributed more broadly.

Allison Nathan: And there's also been a lot of discussion

about the actual type of role that's being impacted here.
So, are you seeing some evidence in the data, the more
junior roles, I would imagine, being impacted? What are
you seeing?

Joseph Briggs: Yeah, there's been a lot of questions

6
around the lagged hiring rates or the difficulties facing
recent college graduates. I'm sure that we all know people
who have had trouble finding jobs or a harder time than
they would have normally following the recent graduations.
This is validated in the data. We're definitely seeing these
lower hiring rates for recent college grads.

A lot of this is just related to the fact that the labor market
has shifted back to a low-hiring, low-firing labor market.
We're seeing this very broadly across sectors, across
different industries, and so I think that the anecdotes and
the relationship that the anecdotes have to AI is often a
little bit overstated. That being said, if we do look at
unemployment rates in the tech sector for young workers --
and so those between ages 20 and 30 -- they have
increased by about 3 percentage points, and this is since
the start of the year. And this is a much larger increase
than we've seen the tech sector more broadly or a larger
increase than we've seen for other young workers.

And so again, the story is one where the overall impacts on

young workers in the labor market, speaking from an
aggregate perspective, is small. But if we start zeroing in
and zooming in on these specific industries where we are

7
seeing AI be used to drive efficiency gains, there are signs
that headwinds are emerging there.

George Lee: Yeah, Allison, I would say I think it's a

real reflection of CEO uncertainty around this entire
phenomenon, which is to say the intuition is that these
tools ought to create enormous productivity and efficiency
in the enterprise. Yet as Joseph's statistics suggest, the
macro effects aren't fully being seen, and so what can you
control as a CEO that seems lower risk? You can lower
your intake hiring and kind of adopt a little bit of a "flat is
the new up" perspective as it relates to your headcount.
That feels like a more prudent move than beginning to
aggressively harvest more senior professionals, etc.

And so I think, again, it's a little bit of a temporal

phenomenon, which is to say I think this is going to be
really meaningful. How do I begin to streamline my
enterprise so I can be more flexible and more adaptive and
do it yet without harming our competitive edge? And
unfortunately, I think young employees for this period of
time are a little bit the casualty of that.

Allison Nathan: And George, more broadly, you speak to

8
a lot of companies, and does what Joseph is basically
observing in the data really reflect in practice in the
conversations you're having?

George Lee: Very much so. And you know, I think I

would echo one thing that Joseph said, which is technology
industry is I think the most profoundly affected in the early
days. And there are sort of two theories of the case there.
One would be, "Well, that's natural," because the place
where the models have the most capability and utility are
in software development and that's a huge part of what
technology companies do every day. So no wonder
displacement's beginning to hit there first.

The other theory of the case is that, because these

companies are on the leading edge of developing and
deploying these tools, they're the canary in the coal mine
for what's going to occur in other industries. And I think
the evidence says -- Joseph is so great about presenting
evidence, data, and being balanced about these things. I
don't know that there's a determinative answer to that
question, but I do think those are the two forks in the road.

Allison Nathan: And I think the biggest question that we

9
have is ultimately will this lead to a net decline in
employment, in job availability? And Joseph, one of the
striking stats that you came up with was that we will see --
you call it transitional displacement on the order of 6-7%
off that, which is I think a big number, but I hear you're
getting pushback that it's too small.

Joseph Briggs: Yeah, it's interesting. Our AI

productivity growth forecasts have always assumed a 6-7%
displacement rate. And after having gone through the
exercise over the last couple weeks of revisiting that and
cranking all the numbers to try to see is that still the right
estimate, that's broadly in the ballpark of where we came
out in terms of the overall displacement rate that will
happen following full adoption of AI.

When thinking about how much AI is going to translate to

an increase in unemployment, which is kind of the flip side
of a decline in employment, it's useful to break it into two
types of unemployment. The first is the more concerning
long-run technological persistent unemployment. I'm much
less concerned about this. If we look back historically,
technology has always added new positions. You know,
85% of job growth over the last 85 years has been driven by

10
technology. I think this is a trend that will reassert itself
once we've seen the rise in aggregate incomes and all the
new opportunities that AI creates.

What I think is more realistic is that we are going to see a

period of frictional or transitional unemployment, where it
does take time for these 6-7% of workers that do lose their
jobs because of automation have to find new positions in
potentially new occupations. And this is a dynamic that
we've seen play out historically. That any time we've seen,
you know, say, a one percentage point boost in labor
productivity due to technology, the unemployment rate
tends to rise by around 30 basis points, three tenths, over
the next year. After two years, there's no effect.

If we try to translate that 6-7% number to an increase in

the unemployment rate in any given year, I go back to the
adoption speed as a key variable to watch. And the reason
that I say that is that, if we're wrong and that AI adoption
and all the displacement takes place of a 1- to 3-year
period, then all of a sudden that 7% displacement rate
translates to a 2-2.5% boost to the unemployment rate.
That's a pretty big macroeconomic shock. It has significant
impacts on spending, on GDP.

11
On the other hand, if we're right and the AI transition takes
10-15 years, then that 7% displacement rate translates to
something like a half point, maybe a little bit less, boost to
the unemployment rate. That seems very manageable and
less disruptive from a labor market perspective.

George Lee: Yeah, I think at the heart of that

question is your belief as to whether this is going to be a
continuous function of adoption of technology and will take
that longer period of time or it has the dynamic of a tipping
point where we'll reach some salient interval where these
tools are mature enough and we have a very sharp
increase. Any reflections on that question?

Joseph Briggs: I agree that if we see the application

build-out happen very quickly -- and again, you know, the
application build-out for a lot of companies is a necessary
step to start using the technology -- then we could be
wrong and the unemployment rate increases could be
larger.

The other thing that I'd flag looking at historical data which
I thought was interesting, if we look at the automation of

12
routine occupations, you're right that it hasn't happened in
a very smooth manner. What we've actually seen is that
during economic slowdowns or recessions, companies that
are forward looking in nature and they're looking to trim
labor costs, they often target those routine occupations
that they're expecting to automate over the next several
years anyway. And these are the areas where you see
employment reductions And so one of the big concerns
that I have in my mind when thinking about whether or not
AI could have a more disruptive impact on the labor market
is that, if we do see an economic slowdown in the next one,
two, three, four years, then at that point a lot of the
automation and labor displacement that could eventually
occur and that we are expecting will occur in a relatively
smooth manner, it could happen in a more narrowly
concentrated period.

George Lee: So Joseph, you do some great work in

terms of identifying jobs that may be more vulnerable to
displacement. What about those jobs that are more
resilient, less exposed? What are some of those job
functions?

Joseph Briggs: Yeah. Given that we're in the very

13
early days of the AI transition, it's hard to have a lot of
confidence when we're looking across different types of jobs
where are we going to see more displacement and
replacement and where we're going to see just AI unlocking
productivity gains that makes people more efficient. You
know, I do think there's a couple of proxies that we looked
at that provide a signal or provide an indication that the
risk of displacement is lower. So, things like occupations
that are more exposed to human interaction. A lot of the
commentary that we've heard from corporates, flags that
back-office work is more likely to be automated in the near
term whereas front office work is more likely to sustain.

Also jobs that have higher stakes of decisions. And so

where making a mistake could expose a company to more
reputational risk or monetary risk. And then occupations
where the type of tasks that people do are less repetitive,
more diverse, and the potentially automatable tasks are
lower value add than a worker's core function.

And so we constructed risk measures for all of these.

When we run 800-plus occupations through the different
risk filters, things that stood out as being potentially less
exposed to automation were medical care providers,

14
pharmacists, door-to-door salespeople, teachers, clergy
members, CEOs. There's a lot of different drivers for each
of these that leads them to be less exposed, but the key
things to bear in mind are those jobs that are less
repetitive, where decision consequences and stakes are
higher, I think are less likely to be replaced in the near
term.

Allison Nathan: And it's striking, the variability you just

gave there. You know, teachers and clergy and CEOs. I
mean, there's a wide spectrum that should be more
resilient.

Joseph Briggs: It's hard for AI to go door to door

and sell products, just like it's hard for AI to run a
company, you know?

George Lee: I also think one of the interesting things

about this discussion is the differential between micro and
macro. When you talk to CEOs, when you're out in the
field, this is sort of an obsessively focused on topic. And
yet, as Joseph's work suggests, it's not finding its way into
the macro statistics yet, and perhaps that's always the case
where there's some fundamental shift. But I'm struck by

15
that. If you weighted the percentage of time CEOs spend
thinking and talking about this issue relative to the
discernable effects in the macro, it's a very strong
disconnect.

Allison Nathan: So interesting. I have a broader

question for you, Joseph, that you touched on, which is
you're looking at history when you make a lot of your
forecasts and assessments of what lies ahead. But if we
think about just how potentially transformative AI is
relative to even past technological innovations, is history
likely to be a guide? How confident can you be in that?

Joseph Briggs: The biggest caveat -- and I should

always add this when we talk about AI -- is that our
analysis doesn't factor in the potential for the emergence of
AGI. You know, if we do see AI not only driving automation
but leading to an acceleration in the pace of innovation and
an expansion in the frontier of human capabilities then in
that world the boost of productivity would be much larger.
It's hard to even start thinking about the impact on the
labor market, but I would guess there probably and
undoubtedly is more room for labor substitution and a
more disruptive impact in that world.

16
There's been a lot of attention on that recently. I don't
personally have a strong view on how close we are to AGI.
George, you might actually be more connected into those
discussions than I am. But I think that is the one potential
tail scenario. How realistic of a tail scenario it is, I don't
know. That could lead to much more significant impacts
on the labor market than we're factoring in.

George Lee: It's a great point. And, look, this

question -- first of all, AGI is a very complex definitional
matter. Everyone I think sees it a little bit differently. In
some ways, I think it's a bit of a canard in the sense that it
is being positioned as this momentary shift in the world.
I'm a believer this is much more of a continuous function,
and that by the time we get to whatever represents AGI or
ASI or whatever, it will have seemed as, again, a
continuous process rather than a moment in time. But
only time will tell. And as Joseph said, there are people
smarter than he and I in the world musing on these topics.

To the point of history, I've gone back and done a little bit
of work on things like very fundamental -- emergence of
very fundamental technologies like telephony and

17
electricity. And those may be, in the most bullish scenario,
might be a more interesting analog than, for instance, the
emergence of the Internet or cloud computing. The impact
of those was extremely vast and yet, to Joseph's work, took
a fair amount of time to really make themselves felt in the
macroeconomic picture.

Allison Nathan: So, you do think history can serve as a

guide but maybe not the history that's really front and
center on most people's mind right now.

George Lee: Certainly not in our recent memory

perhaps. I don't know, Joseph, any reflections on that?
Those kinds of fundamental very deeply historical shifts?

Joseph Briggs: Yeah, I think that the way that I

would frame this is the emergence of general-purpose
technologies. And, you know, we haven't seen a lot of
general-purpose technologies emerge, and I think that
electricity and the electrification of manufacturing the US
in the early 1900s is probably the best analog. The IT
revolution and adoption of software, the Internet, that's the
other one that we often benchmark, too.

18
But I'm very sympathetic to the idea that, given that we
only have a few data points of these types of technological
shifts historically, we do have to be fairly humble in our
ability to use this evidence to extrapolate forward.

George Lee: I think that is very wise counsel. And

you mentioned a thing that I think is also really important
to have in this dialogue, which is the general-purpose
nature of this technology. And that's both a feature and a
bug.

The feature is the breadth of applications are limited really

only by human imagination. The bug is that there's no
user manual. There's no trodden path to follow, and it will
take time for all of us to come up with the best ways to
leverage this fundamental new capability to drive value.
And that's one of the things that extends timelines and
makes Joseph's perspective on this thing so valuable.

Allison Nathan: As always, lots of food for thought.

Thank you so much for joining us, Joseph.

Joseph Briggs: Thank you for having me, Allison

and George.

19
George Lee: Great.

Allison Nathan: George, as we sit here and discuss this

with Joseph, I am reminded of our recent conversation with
Marco Argenti, who was really bullish on the prospect of
even a hybrid workplace at some point in the near future.
In light of the comments we just got from Joseph, do you
have any additional thoughts on that?

George Lee: Yeah, well, I think Marco's perspective --

first of all, you know, he's a very keen observer of all this
and a very broad thinker about it, and so I thought it was a
provocative and interesting perspective, anchoring to a lot
of the commentary we've had here. You know, the rise of
agents, their utility in the enterprise. We have to climb a
hill of maturity there before we see those really emerge as
being effective. In a way, that's a trailing phenomenon to
the rise of generative AI broadly.

The impact of that as it matures could very much be in the

model that Marco envisioned, which is to say managers
have human employees. They're also responsible for a set
of agents that are performing work and tasks that humans

20
might have otherwise done. And that hybrid management
challenge is going to be new, different, interesting, and
possibly an enormous productivity driver in its own right.

Allison Nathan: And I think that a new wrinkle that

Joseph's research revealed that we discussed was if more
junior roles are being taken in the AI space, as you said,
the striking disparity in the rise in unemployment in junior
roles in the tech sector relative to the rest of the economy,
what does that mean for managers? You need to have
people in junior roles to become senior. What's that going
to mean for management ahead?

George Lee: A fundamental challenge. How will the

apprenticeship that creates the next generations of Allison
Nathans and Joseph Briggs, how will that emerge in a
world where there are potentially fewer junior employees
and enterprises? Again, I don't think we should say that
that's the certain outcome, but I think it's really a
fundamental question.

And on the other hand, if there are fewer junior people in

enterprises, there's the potential that their experiences in
those enterprises are more high value, less weighted down

21
by low-value tasks, more deeply connected to senior
managers, and that the quality of the apprenticeship rather
than the quantity may lead us to breed even better senior
leaders. Hopeful lens.

Allison Nathan: Interesting point. Thanks very much,

George. I always enjoy these conversations.

George Lee: Same. And thank you again, Joseph.

Allison Nathan: This episode of Exchanges was recorded

on July 31st, 2025. I'm Allison Nathan.

The opinions and views expressed in this program may not

necessarily reflect the institutional views of Goldman Sachs
or its affiliates. This program should not be copied,
distributed, published, or reproduced, in whole or in part,
or disclosed by any recipient to any other person without
the express written consent of Goldman Sachs. Each name
of a third-party organization mentioned in this program is
the property of the company to which it relates, is used
here strictly for informational and identification purposes
only and is not used to imply any ownership or license
rights between any such company and Goldman Sachs.

22
The content of this program does not constitute a
recommendation from any Goldman Sachs entity to the
recipient and is provided for informational purposes only.
Goldman Sachs is not providing any financial, economic,
legal, investment, accounting, or tax advice through this
program or to its recipient. Certain information contained
in this program constitutes "forward-looking statements,"
and there is no guarantee that these results will be
achieved. Goldman Sachs has no obligation to provide
updates or changes to the information in this program.
Past performance does not guarantee future results, which
may vary. Neither Goldman Sachs nor any of its affiliates
makes any representation or warranty, express or implied,
as to the accuracy or completeness of the statements or
any information contained in this program and any liability
therefore (including in respect of direct, indirect, or
consequential loss or damage) is expressly disclaimed.
Disclosures applicable to research with respect to issuers,
if any, mentioned herein are available through your
Goldman Sachs representative or at
[Link]/research/[Link].
This transcript should not be copied, distributed,
published, or reproduced, in whole or in part, or disclosed
by any recipient to any other person. The information

23
contained in this transcript does not constitute a
recommendation from any Goldman Sachs entity to the
recipient. Neither Goldman Sachs nor any of its affiliates
makes any representation or warranty, express or implied,
as to the accuracy or completeness of the statements or
any information contained in this transcript and any
liability therefore (including in respect of direct, indirect, or
consequential loss or damage) are expressly disclaimed.
The views expressed in this transcript are not necessarily
those of Goldman Sachs, and Goldman Sachs is not
providing any financial, economic, legal, accounting, or tax
advice or recommendations in this transcript. In addition,
the receipt of this transcript by any recipient is not to be
taken as constituting the giving of investment advice by
Goldman Sachs to that recipient, nor to constitute such
person a client of any Goldman Sachs entity. This
transcript is provided in conjunction with the associated
video/audio content for convenience. The content of this
transcript may differ from the associated video/audio,
please consult the original content as the definitive source.
Goldman Sachs is not responsible for any errors in the
transcript.

24