Recent Grads Blame AI for Job Struggles
Recent graduates struggle to find entry-level jobs, often blaming AI. Economists debate whether AI or remote work trends are the main cause.
Recent college graduates are struggling to land entry-level jobs, according to a report from NPR. The unemployment rate for 22- to 27-year-olds with higher education degrees is currently above the national average.
Irene Chang, who studied engineering at Georgia Tech, exemplifies the challenge. Chang graduated in May but started applying for jobs nearly a year prior. She has submitted around 450 applications. Chang suspects artificial intelligence is a key reason she cannot reach the first rung of her career ladder, believing AI can efficiently perform entry-level tasks like data analysis and coding.
Her concern is widespread. A spring survey by ZipRecruiter found nearly half of recent graduates said AI had already affected hiring in their field.
Economists Debate the Cause
Evidence on AI's impact is mixed, and economists disagree on its role. Stanford University economist Erik Brynjolfsson states AI is part of the story for young workers' declining job prospects. He has studied fields more likely to use AI, such as software development and marketing management.
Brynjolfsson found employment of early-career workers in those fields has declined significantly since late 2022, when AI tools like ChatGPT emerged. Employment trends for more experienced workers in the same fields have remained stable. He argues AI technologies disproportionately capture codified knowledge, which overlaps heavily with entry-level skills.
Harvard University economist David Deming is not convinced AI is to blame. He points out that the decline in hiring for junior positions began roughly six months before ChatGPT's release. Deming suggests remote work is a more likely culprit.
He theorizes that the value of hiring a junior worker diminishes when the job is remote, as training from a distance is harder. Conversely, remote work expands the talent pool for more senior positions, making them more attractive to employers.
Data from AI-Heavy Companies
University of Chicago economist Anders Humlum presents another counterpoint. If AI were directly replacing entry-level jobs, companies investing heavily in AI tools would presumably hire fewer workers. Humlum says data shows the opposite is true.
Firms that are heavy users of AI, paying significant sums to companies like Anthropic and OpenAI for their models, are hiring more than anyone else, according to his analysis.
A Major Shift Underway
Despite their disagreement on the current impact, all three economists agree a major employment shift is occurring. Deming predicts a significant reshuffling, where jobs once considered safe will become unsafe and vice versa. He believes the long-term net effect will be positive but warns the transition will be bumpy and messy.
His advice to graduates like Irene Chang is to hang in there. Chang told NPR that hearing the economists' perspectives made her feel somewhat validated as she continues her job search.
