AI Is Threatening Entry-Level Jobs That New Grads Needed to Get On-the-Job Training

“This is a more tectonic shift in the way employers are hiring.”

/ Future Society/ Automation/ Education/ Labor

Image by Getty / Futurism

New reporting by the Wall Street Journal has revealed what many young workers are feeling: that the share of entry-level jobs appears to be shrinking.

The reporting draws on analysis by the Burning Glass Institute, a labor analytics firm. According to its study of unemployment rates among young people, the firm found that individuals of all education levels experienced higher levels of unemployment in 2023-2025 compared to 2018-2019.

By far the biggest change was felt by college students one year after earning their bachelor’s degree, whose unemployment level rose from 3.8 percent to 4.9 percent. Those with graduate degrees didn’t fare much better, rising a whole percentage point from 3.2 to 4.2 percent.

The unemployment rate among people who had some college and no degree, for comparison, rose 0.4 percent over the same period, while those with only a high school diploma rose 0.1. Overall, the unemployment rate for all recent graduates sits at over 6.6 percent, markedly higher than the national average, which hovers around 4 percent.

Meanwhile, the WSJ notes, white collar industries like finance and insurance are still growing, even as their worker base faces growing pressure in wage growth and long-term employment.

Together, the analysis seems to suggest that companies are becoming more efficient, despite slow-rolling new hires — which, though not everyone agrees, implies that AI is making things tougher in the job market.

“This is a more tectonic shift in the way employers are hiring,” Matt Sigelman, president of Burning Glass, told the WSJ. “Employers are significantly more likely to be letting go of their workers at the entry level — and in many cases are stepping up their hiring of more experienced professionals.”

As all this is going on, the WSJ reports that the entry-level job search platform Handshake has hosted 15 percent fewer listings compared to the last academic year. The number of applications per job, meanwhile, rose by around 30 percent.

Luckily, history gives us some clues.

Assuming large language models (LLMs) — the actual tech behind most consumer-facing “AI” — do come to upend the labor market, it will likely look similar to the Industrial Revolution, when low-skilled wage work took the place of skilled trades as the major productive force, thanks to huge advancements in manufacturing tech.

During this period of technological upheaval, many apprentices and young craftworkers were forced to take up factory work to earn a living, subjected to brutal work conditions, downward wage pressure, and the threat of growing unemployment.

Importantly, the Industrial Revolution served to snatch manufacturing power away from artisans and put it into the hands of factory owners. While work looks way different now than it did back then, it’s not difficult to imagine a future where — if entry level jobs remain hard to come by — young workers of all backgrounds are sucked into gig and service work, just as young apprentices were forced into factories in the late 1800s.

However, whether AI actually represents a new Industrial Revolution is another story. The tech is notoriously buggy in real-world applications, and productivity gains are minimal so far. Still, that hasn’t stopped companies and their executives from using the tech to scare employees and decide who to fire, while using AI hype to boost their stock prices.

Those anxieties are heightened when one considers what many are calling the “AI bubble“: the fact that, despite shoveling billions of dollars into the AI furnace, the tech has yet to deliver financial returns even close to what Wall Street number crunchers need — and some say it never will.

Regardless, tech moguls and corporate CEOs have made it abundantly clear that this is the future they want. Ultimately, what happens to the job market should mass automation come to pass won’t just be a matter of corporate finance, but would redefine work for generations to come.

More on AI: Nvidia CEO Says He Has Plans to Either Change or Eliminate Every Single Person’s Job With AI