Additional Coverage:
Gen Z Feeling the AI Squeeze: Entry-Level Jobs Impacted by Automation
A groundbreaking Stanford study reveals the burgeoning AI revolution is disproportionately affecting young professionals, especially those aged 22-25, in fields like software engineering and customer service. Analyzing payroll data from millions of U.S. workers, researchers found a 13% relative decline in employment for entry-level employees in AI-exposed roles since late 2022, a period coinciding with the rise of generative AI. Meanwhile, experienced workers in the same fields have seen stable or even increased employment.
The study emphasizes several key findings:
- Entry-Level Workers Hit Hardest: Young professionals, whose skills are often more easily automated, are bearing the brunt of the impact. Experience and specialized knowledge appear to offer some protection against displacement. This aligns with recent observations from financial institutions like Goldman Sachs and Bank of America, which have noted a shrinking value of college degrees and rising unemployment among recent graduates.
- A Shift Since 2022: The decline in entry-level hiring within AI-exposed occupations began in late 2022, mirroring broader economic trends. In contrast, young workers in less AI-affected sectors have seen consistent employment growth.
- Automation vs. Augmentation: The study differentiates between AI’s use for automation versus augmentation. Job losses are concentrated in areas where AI automates tasks, while fields where AI augments human work have not seen similar declines.
- Robust Findings: The Stanford team ruled out other potential factors, like the pandemic or interest rate fluctuations, emphasizing the correlation between the rise of generative AI and the observed employment trends.
- Impact on Employment, Not Wages: Interestingly, the study found the impact primarily affects employment numbers, not wages. Salary levels have remained relatively stable, suggesting potential “wage stickiness.”
- Consistent Across the Board: These patterns are consistent across various data samples, reinforcing the link between the proliferation of generative AI and the changing job market.
While the study acknowledges these are early findings, the large-scale data offers compelling evidence that AI is reshaping career opportunities for young Americans. The much-discussed economic anxieties of Gen Z are now reflected in employment data, confirming a significant shift in the labor market.