Stanford Finds That AI Is Taking Entry-Level Jobs

A Stanford University study found that AI is hitting young workers the hardest, especially in entry-level roles that were once the bread and butter of college grads.

Why It Hurts: The AI revolution arrived in the labor market at a pretty bleak time — high inflation, a profit-above-all-else atmosphere, and endless layoffs. Company adoption has been so fast that analysts barely had time to measure its effects on real people… until now. The result: Gen Z is finding it harder to land the kinds of starter jobs that once launched careers in desirable industries.

Behind The Curtain: If you’ve suspected AI played a role in your 800 LinkedIn applications being rejected or ignored, you’re not wrong.

• Stanford researchers analyzed ADP payroll data and found that employment for workers aged 22 to 25 in jobs like software engineering and customer support dropped 16% since late 2022 (the launch of ChatGPT, FYI).
• The team made sure to rule out other potential causes, including return-to-office mandates and other boom-and-bust hiring cycles in the tech industry.
• Ironically, companies that use AI to augment their human workforce instead of replacing it are actually hiring more people — suggesting productivity gains are paying off.

The Future: Interestingly, AI isn’t disrupting most industries too heavily and has had little effect on the employment of senior workers — demonstrating that their connections and experience still make them invaluable. Well, at least that’s the case for now.

But for younger workers just starting out, AI is now capable enough to replace them — and companies are gladly doing so, essentially sawing off the career ladder at the bottom. Long term, that could backfire if businesses struggle to cultivate the next generation of experienced employees.

Prediction: Companies that want to stay competitive will likely double down on mentorship and apprenticeship programs to grow human talent alongside AI. No wonder internships and no-college hiring programs are suddenly more competitive than ever.