Goldman just looked at 40 years of data on the ‘scarring’ effects of technological disruption and finds Gen Z isn’t the most at risk

4 weeks ago 12

Wall Street’s most-watched economics team has a warning for workers displaced by AI: The damage could last for years. But in a surprising twist, the people most expected to bear the brunt of the coming disruption—recent college graduates—may actually be the best equipped to weather it.

In a research note published Monday, Goldman Sachs economists Pierfrancesco Mei and Jessica Rindels drew on four decades of individual-level data to assess what they call the “scarring” effects of technological displacement on U.S. workers. Their verdict is sobering. Workers whose jobs are eliminated by technology don’t just struggle in the short term—they can spend the better part of a decade fighting to recover.

“Over the 10 years following a job loss, real earnings for technology-displaced workers grow nearly 10 percentage points less than for never-displaced workers,” the report found, “and 5 percentage points less than for other displaced workers.”

The research team tracked more than 20,000 individuals across two cohorts—one born in the 1950s and ’60s, and another in the 1980s—using the National Longitudinal Surveys sponsored by the Bureau of Labor Statistics. By identifying which occupations faced the steepest technology-driven employment declines in each decade since 1980, they were able to map the full career arcs of workers caught in automation’s path.