Losing your job to AI doesn’t just lead to unemployment, it leaves lasting scars

Source Domain: www.cnn.com

AI-driven job losses may not just make it harder for affected workers to find employment in the short term but also could leave a yearslong “scarring,” marked by depressed income, delayed homeownership and even the lower probability of marriage, according to a new research report from Goldman Sachs.

And those outcomes are even worse if they happen during a recession, Goldman Sachs economists wrote Monday.

The latest analysis comes as economists, policymakers, academics and workers across industries are trying to assess how fast-rising artificial intelligence technologies could affect people, sectors and societies at large. Goldman Sachs previously estimated that 6% to 7% of US workers (about 11 million people) could have their jobs displaced by AI.

Monday’s note explored the potential longer-run effects of AI-related job displacement.

To do so, economists turned to the recent past: They identified occupations usurped by various technological innovations since 1980, and they then tracked the labor market outcomes of workers by applying data from the National Longitudinal Surveys, a federal research effort to gather information at multiple times in people’s lives.

In doing so, the economists came to four conclusions:

Short-run impacts: It can take one month longer for technology-displaced workers to find a new job; and their inflation-adjusted earnings take bigger hits (more than 3%) versus other workers (negligible effect).
Long-lasting impacts: 10 years after a job loss, technology-displaced workers’ real earnings were 10 percentage points below that of non-displaced workers. Technology-displaced workers also had slower wealth accumulation, delayed homeownership and delayed household formation.

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