Young Graduates Face Higher Unemployment: Is AI the Culprit?
Recent graduates with higher education degrees are experiencing unemployment rates that surpass the national average. The question arises: is artificial intelligence contributing to this trend?
Recent data from the Federal Reserve Bank of New York indicates that young adults holding new degrees are encountering higher unemployment rates compared to the overall workforce. Many young job seekers are pointing fingers at artificial intelligence, prompting reporter Lee Gaines to explore their concerns.
Irene Chang, who pursued engineering at Georgia Tech, hoped for a stable career by solving complex problems. However, her journey has been challenging since her graduation in May. She began her job search almost a year ago but is yet to secure an entry-level position.
IRENE CHANG: “I think I’ve applied to around 450 applications now.”
Chang believes AI may be a factor in her difficulties, suspecting that AI’s efficiency in tasks like data analysis and coding might overshadow entry-level skills. A survey conducted by ZipRecruiter in spring found that almost half of recent graduates felt AI had already influenced hiring in their fields. Yet, opinions among economists vary.
Stanford University economist Erik Brynjolfsson suggests that AI is indeed affecting young workers’ job prospects.
ERIK BRYNJOLFSSON: “I would say that AI is not the whole story, but it’s part of the story, and the evidence is building.”
Brynjolfsson’s research into AI-utilizing jobs, such as software development and marketing management, reveals a significant decline in early-career employment since late 2022, coinciding with the emergence of AI tools like ChatGPT. Meanwhile, positions for experienced workers in these fields have remained stable. He posits that AI’s ability to grasp book learning and codified knowledge may impact entry-level workers more.
Conversely, Harvard University economist David Deming questions whether AI is the primary cause of the employment slump for early-career professionals.
DAVID DEMING: “If you look very carefully at the timing, it looks like the decline in junior hiring actually started, like, six months before ChatGPT was released. What that tells me is it’s something else. I think it’s more like remote work.”
Deming argues that the shift to remote work, post-pandemic, might deter employers from hiring entry-level workers, as training them remotely poses challenges.
DEMING: “The value proposition of hiring a junior person when you know they’re going to be at home is just not as great. And conversely, the value proposition of hiring a more senior person is greater. Because of remote work, you have access to a broader pool of talent from around the country.”
If AI were replacing entry-level jobs, one would expect AI-dependent companies to reduce hiring. However, University of Chicago economist Anders Humlum’s data contradicts this assumption.
ANDERS HUMLUM: “If we look at the heavy users of these tools – the firms that are paying a lot of money to Anthropic and OpenAI to subscribe to their models – they’re hiring more than anyone else.”
Despite differing views on AI’s immediate impact on the job market, the economists agree that a significant employment shift is occurring. As Deming of Harvard puts it:
DEMING: “I think jobs that used to be safe will become unsafe and jobs that used to be unsafe will become safe. There’ll be a lot of shuffling around. But I think on net, it’ll be a force for good. But it’ll take some time, and it’s going to be very bumpy and messy, and buckle up.”
For Irene Chang and other job-seeking graduates, Deming’s advice is simple yet profound:
DEMING: “Hang in there.”
After hearing these insights, Chang finds some comfort in the economists’ perspectives.
I CHANG: “It does make me feel a little bit validated. Yeah, I’m definitely holding on to that right now.”
Lee Gaines reported this story for NPR News.
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