AI-Displaced Workers Face Long-Term Unemployment and Pay Cuts

Goldman Sachs reports that workers displaced from AI-exposed jobs since 2025 are experiencing long-term employment difficulties mirroring technological disruptions seen over the last 40 years. Economist Pierfrancesco Mei found that AI-displaced workers take approximately one month longer to find new jobs and are 10 percentage points more likely to remain unemployed after one year than other displaced workers.

The impact varies by age. Workers aged 35 and older face the longest gaps in full-time employment. Conversely, research from the Stanford Digital Economy Lab indicates that AI is primarily reducing the hiring of workers aged 22 to 25 in exposed occupations, even as younger workers generally adapt more flexibly.

Financial recovery for these workers has also declined. Data from the Bureau of Labor Statistics shows that the percentage of long-tenured displaced workers returning to jobs with equivalent or higher pay dropped to 49% for the 2023-2025 period, down from 62% in previous surveys. Challenger, Gray & Christmas reported that AI was the primary driver for 120,136 announced job cuts through September.