Entry-level jobs are disappearing as AI gains ground

The job market is experiencing a significant shift as generative AI begins to impact employment opportunities, particularly for college graduates. Recent US Bureau of Labor Statistics data shows young graduates facing unprecedented challenges finding jobs that match their qualifications. While multiple factors contribute to this trend, economists point to AI’s growing ability to perform the synthesis, research, and presentation tasks traditionally assigned to entry-level college graduates. This emerging disparity between education and employment prospects signals a fundamental transformation in how businesses value human skills versus algorithmic capabilities.

The big picture: Young college graduates are struggling to find suitable employment at historic levels, with generative AI emerging as a potential cause alongside broader economic factors.

• Harvard economist David Deming notes that AI can now perform many tasks traditionally assigned to entry-level graduates, including reading and synthesizing information, producing reports, and creating presentations.
• The timing coincides with major forecasts from firms like McKinsey, which projects 30% of current US jobs could be automated by 2030, while Goldman Sachs suggests automation could reach 50% by 2045.

Why this matters: The challenging job market for graduates may represent the first tangible evidence of AI’s long-predicted impact on knowledge work and white-collar employment.

• Tech companies are simultaneously conducting mass layoffs while significantly increasing investments in AI capabilities, suggesting a structural shift in their workforce needs.
• The potential disruption comes amid warnings about stagflation—a dangerous economic condition combining rising inflation with a weakening job market—which the US hasn’t experienced in decades.

Behind the numbers: Multiple factors complicate the picture, making it difficult to isolate generative AI’s specific impact on employment.

• The job market is still recovering from COVID-19 pandemic disruptions.
• College degrees may offer diminishing competitive advantages compared to previous decades.
• Rapid technological transformations across industries are changing skill requirements faster than educational institutions can adapt.

Reading between the lines: Investment patterns in AI technologies are already reshaping the economy, even as experts remain divided on how profound the eventual impact will be.

• Some experts argue AI capabilities could plateau, limiting its long-term workforce effects.
• Others, including Deming, see evidence that AI investments are already changing the distribution of jobs throughout the economy.