Is AI Really to Blame for High Unemployment Among Recent Graduates? What Economists Say (npr.org) 51
47% of recent graduates say AI has already impacted hiring in their field, according to an April survey from ZipRecruiter.
"But is AI really the problem, or is it more complicated?" asks NPR. "Here's what economists have to say." According to the Federal Reserve Bank of New York, the unemployment rate for recent graduates — which it defines as 22-to-27-year-olds with a new bachelor's degree or higher — was 5.7% as of June, more than the rate for all workers, which stands at 4.1%... Stanford University economist Erik Brynjolfsson says AI is impacting the labor market for entry-level roles. "AI is not the whole story, but it's part of the story and the evidence is building," he says. Using payroll data, Brynjolfsson and his co-authors found that since late 2022 — when large language models like ChatGPT started popping up — early-career workers ages 22 to 25 in AI-exposed roles, like software developers and marketing managers, have experienced a 16% relative employment decline. In comparison, employment rates for older workers in AI-exposed fields and for all workers in jobs that aren't easily automated — like home health aides, physical therapists and construction workers — remained stable or have grown over that same time period... [Though he also says often when companies pull back on hiring, they cut junior roles first.]
Harvard University economist David Deming isn't convinced that AI is to blame for the challenging early-career job market. "If you look very carefully at the timing, it looks like the decline in junior hiring actually started a bit like six months before ChatGPT was released. And so what that tells me is it's something else," Deming says. "I think it's more like remote work." A recent analysis from the New York Fed found that companies are less likely to hire recent college grads into roles that can be done remotely. As remote jobs increased following the COVID-19 pandemic, so did unemployment among younger college grads, the New York Fed found. The analysis also found that AI didn't explain the rise in unemployment among younger workers and that remote work was more of a driving force... Employers hiring for remote jobs may be less likely to choose an entry-level candidate because it's harder to train them from afar... [And with remote positions, there's many more senior candidates to choose from.]
And here's another thing to consider: University of Chicago economist Anders Humlum says if AI were replacing entry-level jobs, you'd expect to see companies that rely heavily on AI to hire fewer workers. But that's not what the data shows. Humlum points to a study done by the financial accounting firm Ramp and the workforce research company Revelio Labs. The study examined AI spending and employee head count across more than 21,000 U.S. firms, from early 2021 to early 2026. It found that at companies making the largest AI investments, entry-level head count grew by 12% over the two years following AI adoption.
"But is AI really the problem, or is it more complicated?" asks NPR. "Here's what economists have to say." According to the Federal Reserve Bank of New York, the unemployment rate for recent graduates — which it defines as 22-to-27-year-olds with a new bachelor's degree or higher — was 5.7% as of June, more than the rate for all workers, which stands at 4.1%... Stanford University economist Erik Brynjolfsson says AI is impacting the labor market for entry-level roles. "AI is not the whole story, but it's part of the story and the evidence is building," he says. Using payroll data, Brynjolfsson and his co-authors found that since late 2022 — when large language models like ChatGPT started popping up — early-career workers ages 22 to 25 in AI-exposed roles, like software developers and marketing managers, have experienced a 16% relative employment decline. In comparison, employment rates for older workers in AI-exposed fields and for all workers in jobs that aren't easily automated — like home health aides, physical therapists and construction workers — remained stable or have grown over that same time period... [Though he also says often when companies pull back on hiring, they cut junior roles first.]
Harvard University economist David Deming isn't convinced that AI is to blame for the challenging early-career job market. "If you look very carefully at the timing, it looks like the decline in junior hiring actually started a bit like six months before ChatGPT was released. And so what that tells me is it's something else," Deming says. "I think it's more like remote work." A recent analysis from the New York Fed found that companies are less likely to hire recent college grads into roles that can be done remotely. As remote jobs increased following the COVID-19 pandemic, so did unemployment among younger college grads, the New York Fed found. The analysis also found that AI didn't explain the rise in unemployment among younger workers and that remote work was more of a driving force... Employers hiring for remote jobs may be less likely to choose an entry-level candidate because it's harder to train them from afar... [And with remote positions, there's many more senior candidates to choose from.]
And here's another thing to consider: University of Chicago economist Anders Humlum says if AI were replacing entry-level jobs, you'd expect to see companies that rely heavily on AI to hire fewer workers. But that's not what the data shows. Humlum points to a study done by the financial accounting firm Ramp and the workforce research company Revelio Labs. The study examined AI spending and employee head count across more than 21,000 U.S. firms, from early 2021 to early 2026. It found that at companies making the largest AI investments, entry-level head count grew by 12% over the two years following AI adoption.
Re: Why do we listen to "economists"? (Score:4, Informative)
Christian Science Monitor is actually a decent news source. You obviously can't avoid bias on stories about faith and religion, but otherwise, it's pretty neutral.
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Re: Why do we listen to "economists"? (Score:2)
The newspaper is founded by the same person who founded the Christian science movement.
one handed economists (Score:2)
President Eisenhower (?) once asked for a one handed economist so that they would never use the phrase "on the other hand".
The main problem is inertia, too many late career economists, government statistic collectors, report publishers, financial analysts, UN, World Bank, think tanks and more have a vested interest in not changing things, how statistics are collected, what statistics are collected and published until after they have left the labor force.
Once they start collecting more up to date data, inste
Yes, and... (Score:4, Insightful)
Like your mom? (Score:2)
If 61.4% of the people are working then by definition 38.6% are not working (100 - 61.4 = 38.6). The "official" 4.1% number is achieved by deliberately not counting millions of people, because 4.1% sounds much better than 38.6%.
You know the majority of those numbers are housewives/moms, right (as well as a very tiny few stay at home dads and early retirees)? If you're old enough to comment on this site, I'll wager your mom stayed home to raise you, for at least a few years, even if she didn't, I know several of your peers had stay at home moms. If you actually hung out with the opposite sex, you'd know this.
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The phenomenon of "rich getting richer" is characteristic of all free markets during times of economic health. It's an easy thing to demonize but simple practical realities make this inescapable.
At its essence, acquiring wealth requires making investments (which could include building businesses just as much as buying ones that already exist). Making such investments requires capital. People who don't have any can maybe get a business loan, but that puts a harsh upper limit on how much they can earn from
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Economic health is irrelevant. The rich get relatively richer when regulations don't prevent it. End of story.
They all know that if they aren't taking more of the pie, then their mate down the road will do it. That's simple bottom feeding greed in action.
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The phenomenon of "rich getting richer" is characteristic of all free markets during times of economic health. It's an easy thing to demonize but simple practical realities make this inescapable.
At its essence, acquiring wealth requires making investments (which could include building businesses just as much as buying ones that already exist). Making such investments requires capital.
Well, aside from an actual "free market" not existing, you are spot on.
I've built up some wealth, gradually, and yes - it requires investments.
Wealth is THE ladder to attaining wealth. Ordinary jobs are just a means of keeping bread on the table while building initial capital to get in on the investing. Some specialist jobs can pay pretty well but not well enough to make the kind of money that we associate with the super rich.
Pretty much this. I have one of those "specialist jobs" but even that money is used for investments once beyond the basics. It helps. But you have to work at it. I couldn't invest seriously until I hit my late 40's.
Now for people upset about other people having more money than they do, the question isn't about greed, the question for them is about what is keepin
The Twitter Effect. (Score:1)
Regardless of the oft-debated reasons Elon Musk chose to purchase Twitter, no CEO will ever be able to overlook what happened next. Which was effectively an eighty percent reduction in headcount with little real impact on operations.
When you have that kind of inarguable glaring statistic defining exactly how the tech world works with government to "create moar jobz", it becomes a bit painful to admit that those were never real jobs. Which eventually manifests in the job market of reality as a measure of u
They had massive impact on operations (Score:2, Insightful)
Twitter has a major problem. So the US Republican party are basically nazis. I don't say that as some dumb edgy insult I mean it. They are active fascists with a heavy emphasis on racism. This is not up for debate it's just a brute fact. We all know what the southern strategy is and we all know that the Republican party routinely engages in voter suppression.
Now the US Republican
It is not just due to AI (Score:1)
Do you like being lied to? (Score:5, Insightful)
Getting back to how much you like being lied to, again there is a propaganda Network feeding you that line and you are willfully sloping it up like a pig at a trough. Why? Literally a few minutes on Google and you can find the government backed statistics that tell you degrees awarded by Major and you can see that there is a very tiny handful of people getting degrees that do not have an immediate productive economic purpose. Everything else is people doing work and a bunch of teachers. And you need teachers for your fucking crotch fruit.
Again I ask why do you actively seek out people to lie to you and obvious ways? I would legitimately like an answer and a explanation for why you find that so engaging and entertaining.
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If you cannot be bothered the pry yourself away from right-wing propaganda then I cannot be bothered saving you.
Nothing I say to you will matter because you're going to go right back to Fox News or OEM or whatever your preferred source of lies is and any progress you made joining us in the real world will be completely and instantly undone.
You are the only one who can save yourself now. And I seriously doubt you can.
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Yeah it's totally the outside new scary thing (Score:1)
And definitely not that the college kids these days literally don't read and occasionally don't know arithmetic beyond the middle school level.
https://www.nytimes.com/2025/1... [nytimes.com]
https://www.kpbs.org/news/educ... [kpbs.org]
It's totally not anything within one's own control. It's absolutely the outside forces conspiring against you.
Almost makes one admire the stereotypical millenial liberal arts grad slinging coffees or flipping burgers. At least *he* didn't think he's too good for gainful employment that may be outside h
The short answer is "yes". (Score:2)
This is almost trivially obvious across the white-collar universe. Companies aren't hiring junior-level employees because in many cases, AI can do almost as good of a job for a tiny fraction of the price.
The reality is, of course, more nuanced. Case in point, Most fields have both back-office and front-end workers. If you're back office, you'd better be 40+ and at the peak of your career, because
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You are letting your sleeves show though when you go on about the covid pandemic that happened quite a while ago and has absolutely nothing to do with this. Just a friendly reminder that when the baby boomers die in the next few years because those rapacious motherfuckers took all the m
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To save you some Googling, that'd be March 11, 2020 (or earlier depending on how long CCP was hiding it) < November 30, 2022 < May 5, 2023.
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Many companies hold back hiring (Score:4, Insightful)
...because they merely expect AI to replace existing tasks. Whether it actually does is more nuanced. For example, many employees pressured to use AI say it makes their tasks harder by creating AI slop that needs cleaning up. They have to deal with mistakes that wouldn't be in a human draft or in existing time-tested templates. If and how fast employees will get better models or learn to prompt better is unknown.
It's essentially management's gamble. Those in the C-suite often don't spot or are slow to understand front-line patterns, as nobody likes delivering lackluster news to higher-ups. They'll typically hear, "There are a few learning curve hiccups, as expected, but we're making progress" even if the productivity ship is taking on a little water.
I'm old enough (Score:2)
I'm old enough to recall the olden time - two years ago - when the hiring had slowed because there were fears (that had gone nowhere, just muted) that US economy is overheated and about to enter a recession.
But I guess the underlying conditions for recession are harder to spot, when the economic data are dominated by inflation (gas prices) and inflation (AI bubble).
Alternate Hypotheses (Score:2)
1) Saturation / delayed retirement. There's only so many of X profession needed in a region. The excess stops pushing down wages and is simply not hired.
2) Too many managers, not enough workers. Somebody has to do the job.
3) Lack of economic growth. Growing companies need more hires.
Comparing to past history (Score:3)
"According to the Federal Reserve Bank of New York, the unemployment rate for recent graduates — which it defines as 22-to-27-year-olds with a new bachelor's degree or higher — was 5.7% as of June, more than the rate for all workers, which stands at 4.1%"
The unemployment rate may be 5.7% for recent graduates, but the underemployment rate is 42.0%. That counts people who are working at a job that doesn't require their college degree. The unemployment rate was as low as 3.9% in May 2022, when the underemployment rate was 40.7%. That means that the full-employment rate has been quite steady over the last few years. There has been very little change in job finding probabilities for a single individual.
However, there are factors that make a similar employment rate feel worse. College costs have risen, and today's graduates have a lot of debt, while inflation-adjusted salaries have lagged while inflation chugs ahead.
Who the hell works in the field they majored in? (Score:2)
That counts people who are working at a job that doesn't require their college degree.
Less than half my software engineer coworkers have a degree related to computers. Some of our top programmers have chemsitry, physics, history, even English degrees. So what's the historical trend? The majority of jobs out there don't have a specific major for them. There's no mainstream "management" major...yeah, there's business administration degrees and definitely MBAs...and in tech, less than half of the senior managers have MBAs and none that personally I know of have a bachelor's degree in busine
Hiring (Score:4, Insightful)
Regardless of any wider impact from skill mismatch or automation, AI has most definitely negatively impacted the hiring process.
It only matters if you can quantify it (Score:2)
Regardless of any wider impact from skill mismatch or automation, AI has most definitely negatively impacted the hiring process.
We don't honestly know. Most of us want to think that's true, but in economics, if you can't prove it, it's not real. We can prove interest rate increases impacted it. We can prove that economic headwinds impacted it. We cannot determine if employers are really hesitating to hire entry level programmers because they think AI can do it...or they're not sure they will have enough business to invest in future talent. We can reasonably model what hiring would look like if interest rates were halved. We ca
Yes, but not in the way they're suggesting (Score:1)
We're finding it increasingly difficult to hire new starters. Resumes are getting prettier while interviewees are clearly getting less capable. To us it seems that as recent graduates integrate and depend on AI tools they're actually learning and retaining less knowledge and skills about IT and software development.
The teaching method has become poor. (Score:2)
Plus less interaction, specifically more anti-social learning practices at-home (that includes AI a bit, but that is not the problem just a symptom) leads to anti-social non interactive employees that are also less lea