Artificial intelligence and robotics in the hydrogen lifecycle: A systematic review

AI Risks 'broken' Career Ladder For College Graduates, Some Experts Say

Artificial intelligence could upend entry-level work as recent college graduates enter the job market, eliminating many positions at the bottom of the white-collar career ladder or at least reshaping them, some experts told ABC News.

Such forecasts follow yearslong advances in AI-fueled chatbots, and declarations from some company executives about the onset of AI automation.

Dario Amodei, CEO of Anthropic, which created an AI model called Claude, told Axios last week that technology could cut U.S. Entry-level jobs by half within five years.

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When Business Insider laid off 21% of its staff last week, CEO Barbara Ping said the company would go "all in on AI" in an effort to "scale and operate more efficiently."

Analysts who spoke to ABC News said AI could replace or reorient entry-level jobs in some white-collar fields targeted by college graduates, such as computer programming and law.

Current job woes for this cohort, they added, likely owe in part to economic conditions beyond technology. Many blue-collar and other hands-on jobs will remain largely untouched by AI, they said, noting that tech-savvy young workers may be best positioned to fill new jobs that do incorporate AI.

"We're in the flux of dramatic change," said Lynn Wu, a professor of operations, information and decisions at the University of Pennsylvania. "I sympathize with college graduates. In the short run, they may stay with mom and dad for a while. But in the long run, they'll be fine. They're AI natives."

Over the early months of 2025, the job market for recent college graduates "deteriorated noticeably," the New York Federal Reserve said in April. It did not provide a reason for the trend.

The unemployment rate for recent college graduates reached 5.8%, its highest level since 2021, while the underemployment rate soared above 40%, the New York Fed said.

Youth unemployment likely stems from trends in the broader economy rather than AI, Anu Madgavkar, the head of labor market research at the McKinsey Global Institute, told ABC News

The softening job market coincides with business uncertainty and gloomy economic forecasts elicited by President Donald Trump's tariff policy.

"It's not surprising we're seeing this unemployment for young people," Madgavkar said. "There is a lot of economic uncertainty."

Still, entry-level tasks in white collar professions stand at serious risk from AI, analysts said, pointing to the technology's capacity to perform written and computational tasks as opposed to manual work.

Anthropic CEO Dario Amodei looks on as he takes part in a session on AI during the World Economic Forum (WEF) annual meeting in Davos, on Jan. 23, 2025.

Fabrice Coffrini/AFP via Getty Images, FILE

AI could replace work previously performed by low-level employees, such as legal assistants compiling relevant precedent for a case or computer programmers writing a basic set of code, Madgavkar said.

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"Is the bleeding edge or the first type of work to be hit a little more skewed toward entry-level, more basic work getting automated right now? That's probably true," Madgavkar said. "You could have fewer people getting a foothold."

Speaking bluntly, Wu said: "The biggest problem is that the career ladder is being broken."

For the most part, however, Madgavkar said entry-level positions would change rather than disappear. Managers will prize problem-solving and analysis over tasks dependent on sheer effort, she added, noting the required set of skills will likely include a capacity to use AI.

"I don't think it means we'll have no demand for entry-level workers or massively less demand," Madgavakar said. "I just think expectations for young people to use these tools will accelerate very quickly."

Some jobs and tasks remain largely immune to AI automation, analysts said, pointing to hands-on work such as manual labor and trades, as well as professional roles like doctors and upper management.

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Isabella Loaiza, a researcher at the Massachusetts Institute of Technology who studies AI and the workforce, co-authored a study examining the shift in jobs and tasks across the U.S. Economy between 2016 and 2024.

Rather than dispense with qualities like critical thinking and empathy, workplace technology heightened the need for workers who exhibit those attributes, Loaiza said, citing demand for occupations like early-education teachers, home health aides and therapists.

"It is true we're seeing AI having an impact on white-collar work instead of more blue-collar work," Loaiza said.

But, she added, "We found that jobs that are very human-intensive are probably more robust."

For Some Recent Graduates, The AI Job Apocalypse May Already Be Here

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Rising Number Of College Grads Are Unemployed, New Research Shows

Recent college graduates are having a harder time finding work, despite their higher education degrees, which usually give job-seekers a leg up in the labor market. 

That's according to a new report from Oxford Economics which shows that unemployed recent college grads account for 12% of an 85% rise in the national unemployment rate since mid-2023. That's a high number, given that this cohort only makes up 5% of the total labor force. 

What's more, the rate of unemployment among workers who have recently graduated from college and are between the ages of 22 and 27, is nearing 6% —which is above the national unemployment rate of 4.2%. 

"People who have obtained a bachelor's degree or higher have a higher unemployment rate than national average, and this is the first time this has happened in the last 45 years of data," Matthew Martin, senior U.S. Economist at Oxford Economics, told CBS MoneyWatch. 

That's noteworthy, he said, because "those with higher educational attainment usually have better prospects overall than their peer with less."

So why are recent college grads are having a tougher time finding work post-college than previous graduating classes did?

While the report points to a couple of factors, it finds that a slowdown in hiring in formerly hot sectors is driving the growth in unemployment among degree holders.  

"The rise in the recent graduate unemployment rate is largely part of a mismatch between an oversupply of recent graduates in fields where business demand has waned," according to the report. 

That holds especially true in the tech industry, as more college students graduate with degrees in computer science and related fields than any other major. 

"Prospects for employment will remain minimal for these individuals, keeping the unemployment rate elevated in the near term," Oxford Economics researchers wrote in the report. 

Tech sector-centric

Computer science is among the fastest-growing fields of study among undergrads, according to the National Center for Education Statistics, but jobs in the sector are particularly vulnerable to replacement by automation. Recent advances in artificial intelligence also expose workers in the field to being rendered obsolete.

"There's a mismatch between business demand and the labor supply overall," Martin said. "And it's very concentrated in the technology sector."

The industry hired at a fast clip when the economy reopened post-pandemic, before pulling back. Those cuts are likely still affecting the current unemployment rate, according to Martin. 

"Some of it could be a normalization after the tech sector's hiring surge at the end of the pandemic around 2021," he said. "But there's also evidence that AI is starting to impact lower-level computer science gigs," he added.

Experienced workers who graduated with computer science degrees but have racked up more than a few years of experience are faring fine, noted Martin. It's those who do the kind of lower-level, rote work that AI is already adept at, who are seeing a mismatch between the number of jobs available and the supply of workers seeking them. 

"Some of it might be businesses being productive with the workers they have and not wanting to increase costs overall by hiring. It could also be higher adoption rates of AI," Martin said. "At the moment, it looks to be a bit of both."

Uncertainty slows hiring

Economic uncertainty, driven largely by President Trump's aggressive, yet ever-changing tariff agenda, is also leading a number of businesses to press pause on growth and investment. Because of this, the unemployment rate among recent college graduates could continue to inch upward, according to Martin.

"We are heading into a period where uncertainty is really high; the impact of tariffs is starting to bleed through, and businesses are facing higher input costs," he said. 

Although recent college graduates who have secured employment aren't being laid off at higher rates than the rest of the workforce, Martin doesn't expect things to get easier for young graduates on the hunt for employment, absent a surge in hiring by tech companies or mass exodus of workers from the labor force.

"There is some softening in demand overall, but a lot of it is concentrated at the moment in recent college graduates, and we are looking for the unemployment rate to rise," he said. 

The "underemployment" effect

When qualified workers with college degrees try and fail to find work in their desired field, they tend to continue seeking work, sometimes looking for a job in another sector, as opposed to withdrawing from the labor force, the report notes. That can lead to college-educated workers finding themselves "underemployed," or in roles where 50% of the workers who occupy them do not have a bachelor's degree or higher. 

This scenario can doom them for years to come: Underemployed workers tend to remain so for the rest of their careers, according to a report. 

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Megan Cerullo

Megan Cerullo is a New York-based reporter for CBS MoneyWatch covering small business, workplace, health care, consumer spending and personal finance topics. She regularly appears on CBS News 24/7 to discuss her reporting.

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