Millions of young people will be graduating from college this month, only to face a job market that is increasingly resistant to their skills. The New York Times reports that industries are rapidly adopting artificial intelligence to replace entry-level workers, who are now seen as expensive and expendable. This situation is not just a temporary economic fluctuation but a significant shift in the labor market.
Analysts and corporate leaders are warning of a growing crisis for recent graduates, particularly in fields like finance and computer science where AI has made the most progress. The unemployment rate for these graduates has reached 5.8%, a figure that the Federal Reserve Bank of New York has called a ‘notable deterioration.’ Oxford Economics has found that this unemployment is especially concentrated in technical fields, where AI is displacing entry-level positions at an alarming rate.
Interviews with professionals in the field reveal that companies are making rapid progress in automating entry-level tasks. AI companies are competing to develop ‘virtual workers’ that can replace junior employees at a fraction of the cost. Corporate strategies are also evolving, with some firms encouraging managers to adopt an ‘AI-first’ approach, testing whether tasks can be performed by AI before hiring human workers. One tech executive shared that his company no longer hires anything below an L5 software engineer, a mid-level role typically held by those with three to seven years of experience, as lower-level tasks can now be handled by AI coding tools. Another reported that his startup now employs a single data scientist to handle tasks once requiring a team of 75 people at his previous company.