AI is quietly weakening entry-level job hiring, prompting calls to retrain young workers for an AI-augmented workplace

A Stanford Digital Economy Lab working paper released in November 2025 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, while more experienced workers in those same occupations did not suffer the same decline.

The article argues firms may be using AI to substitute for junior tasks—like drafting, coding, and customer service—that traditionally provided entry-level workers their first foothold in careers such as software development, customer service, and information systems management.

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 underemployment reached 42.5%, its highest level since the covid pandemic.