AI job displacement is looking extra painful
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Illustration: Lindsey Bailey/Axios
AI may be repeating a painful pattern from previous technological revolutions: Workers who lose their jobs because of the technology struggle to find employment and risk displacement all over again.
Why it matters: AI does not need to trigger mass layoffs to cause lasting damage.
- Against the "low-hire, low-fire" backdrop, workers whose skills become obsolete could struggle to find new jobs and suffer years of lost earnings — even if the broader economy avoids a major rise in unemployment.
What they're saying: Workers displaced by earlier technological shifts — including personal computers and industrial automation — often ended up in less-skilled jobs as demand for their expertise faded, Goldman Sachs economist Pierfrancesco Mei wrote in a new note.
- "We see early signs of a similar pattern today," Mei wrote.
By the numbers: Workers most likely displaced by AI in 2025 took roughly a month longer to find new employment than other laid-off workers, according to Mei's analysis of more than 15,000 workers who lost jobs between 2016 and 2025.
- There's no definitive count of how many workers have lost jobs to AI. The research instead estimates which layoffs were most likely AI-related — based on workers' occupations, industry AI adoption rates and the circumstances, such as whether their positions were eliminated.
- Those workers were roughly 10 percentage points more likely to remain unemployed a year after losing their jobs.
- Among displaced workers from AI-exposed jobs who found new work in 2025, roughly three-quarters landed in occupations with similar or greater AI exposure — up from just over half in 2023.
The big picture: AI could eventually create new kinds of jobs, but those opportunities may take years to materialize.
Between the lines: Older workers are especially vulnerable to AI-related employment disruption.
- Then. A Goldman Sachs analysis from earlier this year, looking at three decades of job losses, found that workers over age 55 displaced from declining occupations suffered earnings losses exceeding 10% when they found new full-time work. Those under 35 saw almost no losses.
- Now. Workers under 35 most likely displaced by AI took about three weeks longer to find full-time jobs than other laid-off workers their age. For those 35 and older, that gap was five weeks.
What to watch: Young college graduates are struggling to get hired, raising the possibility that AI is replacing some of the entry-level work that once launched their careers.
- Recent graduates' unemployment rate averaged 5.4% in the third quarter, compared with 4% for all workers, according to Federal Reserve Bank of New York data updated Monday. That gap has roughly doubled since 2019.
- Underemployment is also rising: About 42% of employed recent graduates held jobs that don't require a degree, up a percentage point from before the pandemic.
The bottom line: Technological revolutions have made the economy more prosperous but left some workers permanently worse off. AI risks repeating that pattern.
