Key Takeaways
- Millions of new college graduates face a tough job market as industries increasingly turn to artificial intelligence.
- Unemployment rates for recent graduates are up, particularly in technical fields like finance and computer science.
- Companies are rapidly automating entry-level work, with some adopting an “AI-first” strategy before hiring humans.
- This shift may indicate a significant change in the value and roles of entry-level employees.
A wave of young people graduating from college this month is stepping into a job market with some unsettling realities.
Many industries now have less use for their skills, view them as costly, and are quickly replacing their roles with artificial intelligence.
This troubling picture emerges from recent conversations with economists, corporate executives, and young job-seekers, as detailed in a recent article by The New York Times.
Many sources point to a growing crisis for those just starting their careers, largely driven by the rapid advancements in AI capabilities.
Hints of this trend are already visible in economic data.
Unemployment for recent college graduates has climbed to an unusually high 5.8 percent in recent months.
The Federal Reserve Bank of New York has also warned that the job situation for these young workers has “deteriorated noticeably.”
Adding to this, Oxford Economics, a firm studying labor markets, found that unemployment among new graduates is especially high in technical areas.
Fields like finance and computer science, where AI has made significant strides, are seeing the biggest impact.
The research firm noted in a report that “there are signs that entry-level positions are being displaced by artificial intelligence at higher rates.”
But the official numbers might only be scratching the surface.
Interviews reveal that companies are making fast progress in automating tasks typically done by entry-level staff.
AI companies are also racing to create “virtual workers” capable of replacing junior employees at a much lower cost.
There’s also a shift in how companies think about automation.
Some firms are now encouraging managers to take an “AI-first” approach, meaning they test if AI can do a task before considering hiring a person.
For instance, one tech executive mentioned his company no longer hires software engineers below a mid-level position, typically requiring three to seven years of experience.
He explained that AI coding tools can now handle the lower-level tasks.
Another executive shared that his startup employs just one data scientist for work that, at his previous company, required a team of 75 people.
These developments suggest a significant transformation in the entry-level job landscape, with AI playing an increasingly central role.
