‘Humans might follow the path of horses’: Goldman assessed the potential severity of the AI-driven ‘job apocalypse’—and its experts found the results unexpectedly reassuring

The Impact of AI on the Future of Work

Back in 1983, Nobel laureate economist Wassily Leontief posed a provocative question: could technological progress eventually make human labor as obsolete as horses became with the rise of tractors and automobiles in the early 20th century? He wondered if computers might one day replace human intellect just as engines replaced animal power.

Recently, two analysts from Goldman Sachs, Joseph Briggs and Sarah Dong, revisited this idea in their report, “How Concerned Should We Be About a Job Apocalypse?” Their findings suggest that while the threat is real, it may not be as dire as some fear.

According to their research, drawing on data from the Department of Labor, up to a quarter of all work hours could be automated by artificial intelligence. They predict that the transition to AI will result in significant workforce disruption.

However, the effects of AI on employment will not be uniform. The analysts project a 15% boost in labor productivity due to AI, and based on historical trends, estimate that 6-7% of jobs could be lost during the adoption phase.

They also anticipate that the peak increase in the unemployment rate could reach about 0.6 percentage points, which would translate to roughly one million additional unemployed individuals.

While these numbers may seem alarming, there is a silver lining.

Goldman Sachs points out that past waves of technological innovation have consistently generated entirely new categories of employment that were previously unimaginable.

They note that only 40% of today’s workforce is employed in occupations that existed 85 years ago, highlighting how technological advancements like AI are likely to create new jobs even as they make others redundant.

For example, over 6 million people now work in computer-related fields that didn’t exist three or four decades ago, and another 8 to 9 million are employed in jobs enabled by the gig economy, online commerce, digital content, or gaming.

Tom Lee, head of research at Fundstrat, recently drew a parallel between the current AI revolution and the introduction of frozen foods in the 1920s during a discussion on the Prof G Markets podcast with Scott Galloway and Ed Elson. He cited research showing that the shift to frozen foods reduced farm labor from 40% to just 2% of the U.S. workforce, yet the economy benefited as new types of jobs emerged.

He imagined a scenario where, if television business news had existed in the 1920s, experts might have warned that frozen food would devastate the economy by eliminating most farming jobs. Instead, the innovation freed up time, allowed workers to transition to new roles, and ultimately led to the creation of an entirely different labor force.

Historical Perspective and Further Reading

Leontief originally wrote, “The role of humans as the most important factor of production is bound to diminish in the same way that the role of horses … was first diminished and then eliminated.” Over time, this has often been paraphrased as, “Humans could go the way of horses.”

This article first appeared on Fortune.com.