AI may cause a college graduate job crisis. What should young people do?

Andres Oppenheimer

There’s comforting news for veteran office workers and professionals, but bad news for recent college graduates. When it comes to the future of jobs, new data suggest that artificial intelligence (AI) may threaten young people’s employment prospects more than any other group.

Recent studies show that we’re very close to a college graduate unemployment crisis, because entry-level white collar jobs are the easiest to be replaced by artificial intelligence. Most graduates entering the workforce do repetitive research and number-crunching jobs — precisely the ones AI does best.

Unemployment among U.S. college graduates has risen 30%, from 2% to 2.6%, since September 2022. By comparison, unemployment among the general population has grown by only 18%, from 3.4% to 4%, according to Federal Reserve Bank of New York data.

The ADP Research Institute, which specializes in labor market data, said in a report that “finding a job has become harder” for young college graduates. This is not due to an oversupply of graduates: In fact, full-time student enrollment at U.S. higher education institutions has fallen in recent years, as The Wall Street Journal reported on May 19.

A recent survey of 3,000 executives by LinkedIn, the social media platform, found that 63% agreed AI will eventually eliminate the jobs currently done by entry-level employees.

Curious about how AI will impact all jobs — including mine — in the future, I contacted last year’s co-winner of the Nobel Prize in Economics Daron Acemoglu. In a wide-ranging interview, he told me that he doesn’t think experienced attorneys, accountants, physicians, teachers or journalists will lose their jobs to AI — at least not over the next 10 years.

“I would not want an AI to represent me in court,” Acemoglu told me. “We’re not going to see the end of lawyers, accountants, auditors, marketing professionals. These are deeply complex jobs.”

He added that current AI models and the ones that are likely to be developed in the near future will be able to handle parts of these jobs, but not replace humans entirely.

“The same for physicians,” he said. AI is getting better and better at diagnosis, but there is a lot of tacit knowledge that doctors gain through experience that AI will find hard to replicate, he added.

A doctor learns a lot from a patient’s body language, or from the way a person describes his pain, or from the way different parts of the body react when touched, Acemoglu explained.

But when I asked him about AI’s impact on young people’s employment opportunities, he started by saying, “Well, I’m worried, I wouldn’t hide that from you.”

As for what advice he’s giving his students and other young people these days, he said they should focus on specialization and flexibility.

“The advice I would give is to build very specialized skills that they can be excellent in some domain, so that they are a potential partner for AI, not a target,” he said. And flexibility is essential, too, “because you need to change what you do as technology changes,” he added.

Acemoglu, who teaches at the Massachusetts Institute of Technology (MIT), says a small group of technology barons who dominate the industry are partly to blame for the college graduate unemployment problem. They are creating AI programs to help companies cut costs by eliminating jobs, rather than focusing on increasing productivity and creating more jobs.

I confess that, after speaking with Acemoglu and other experts in recent months, I’m less optimistic than I used to be. When I wrote my 2018 book “The Robots Are Coming,” about the future of jobs in the age of automation, I was a cautious techno-optimist.

I tended to believe the technology industry mantra that new technological breakthroughs always end up creating more jobs than they destroy. But now? I’m not so sure.

Think about it: When Henry Ford rolled out the car manufacturing assembly line in the early 20th century, sure, carriage makers and stable hands lost out. But whole new industries were created to build roads, bridges, tires and other car parts. But today, when a supermarket replaces a human cashier with an automated checkout machine, that job usually just disappears.

To be sure, having a college — or, better, a graduate — degree is more important than ever. Even the latest figures show that those with college diplomas are much less likely to be unemployed than the general population.

But it’s imperative for high schools and colleges to teach students, in addition to specialized skills, how to use AI as a tool in their careers — not just as an enhanced Google search engine.

That would help college graduates get jobs that until recently were reserved for people with two or three years of work experience. Without that, AI may end up hurting recent graduates more severely than it affects older, more experienced workers.