The Looming Crisis in Entry-Level Work

['Artificial intelligence has not yet produced a straightforward story of mass unemployment. Aggregate employment in developed countries remains stable, and recent assessments have found limited evidence that AI has significantly impacted headline numbers. However, a troubling change may be hiding beneath the surface: the quiet weakening of the first rung of the career ladder.', "The most worrisome evidence is emerging in early-career hiring.

A working paper released in November 2025 by the Stanford Digital Economy Lab found that workers aged 22 to 25 in the most AI-exposed occupations experienced a 16% relative decline in employment after the spread of generative AI, even after controlling for other factors that might affect firms' employment decisions. An Anthropic report from March 2026 provides suggestive evidence that led to a similar conclusion. More experienced workers in those same occupations did not suffer the same decline.

Employment is not declining in entry-level jobs with low AI exposure. The concern is specific to early-career jobs that are exposed to AI.", 'That is not a minor signal. It suggests that firms may be using AI to substitute for the junior tasks through which people traditionally gain their first foothold—at least for those in jobs where generative AI is used extensively, like software developers, customer service representatives, computer programmers, and information systems managers.

The time is now to make changes in the way we train, prepare, and support young people who are about to enter the workforce. Educational institutions need to reorient for the era of an AI-augmented workforce. Governments must incentivize businesses to hire and train early-career workers.

Businesses, in turn, need to recognize the importance of developing a long-term workforce experienced in AI—a process that begins with entry-level workers.', 'The broader labor market for recent graduates is also softening. The Federal Reserve Bank of New York reported that in the fourth quarter of 2025, the unemployment rate for recent college graduates rose to 5.6%, while the underemployment rate (the share of graduates working in jobs that typically do not require a college degree) reached 42.5%, its highest level since the COVID pandemic. No single statistic can prove that AI is the sole cause of that deterioration.

Hiring in general is way down post-pandemic, and young people are particularly vulnerable to the slowdown. But it would be a mistake to ignore the possibility that AI is accelerating an already difficult transition from school to work.', "Behind these statistics is a great deal of personal distress. Recent graduates today often submit hundreds of applications before they receive a single offer, and surveys consistently find elevated rates of anxiety, financial precarity, and burnout among young workers in extended job searches.