Young People Face a Hiring Crisis. AI Is Making It Worse

This is a hard time to be a young person looking for a job. The unemployment rate for recent college graduates has spiked to recession levels, while the overall jobless rate remains quite low. By some measures, the labor market for recent grads hasn’t been this relatively weak in many decades. What I've called the “new grad gap”—that is, the difference in unemployment between recent grads and the overall economy—just set a modern record.

Source: The Atlantic

In a recent article, I offered several theories for why unemployment might be narrowly affecting the youngest workers. The most conventional explanation is that the labor market gradually weakened after the Federal Reserve raised interest rates. White-collar companies that expanded like crazy during the pandemic years have slowed down hiring, and this snapback has made it harder for many young people to grab that first rung on the career ladder.

But another explanation is too tantalizing to ignore: What if it’s AI? Tools like ChatGPT aren’t yet super-intelligent. But they are super nimble at reading, synthesizing, looking stuff up, and producing reports—precisely the sort of things that twentysomethings do right out of school. As I wrote:

The strong interpretation of this graph is that it’s exactly what one would expect to see if firms replaced young workers with machines. As law firms leaned on AI for more paralegal work, and consulting firms realized that five 22-year-olds with ChatGPT could do the work of 20 recent grads, and tech firms turned over their software programming to a handful of superstars working with AI co-pilots, the entry level of America’s white-collar economy would contract.

In the weeks after my article came out, I saw a torrent of concern about AI and entry-level work. My friend Kevin Roose at the New York Times reported that "the troubling conclusion of my conversations over the past several months with economists, corporate executives, and young job-seekers" is that white-collar industries are "rapidly phasing out their jobs" for AI. Anthropic CEO Dario Amodei predicted that AI could wipe out half of entry-level employee jobs within the next five years. Aneesh Raman, a LinkedIn executive, pointed to internal research showing that office jobs with advanced degrees had the highest threat of disruption.

Before we light each other’s hair on fire about the robotpocalypse, let’s be clear about something: It’s hard to find conclusive economic evidence that AI is destroying jobs. News cycles move quickly, technology moves slower, and macroeconomics moves slowest. The tempest might not be on us, but this is the time to look for storm clouds.

If anybody could provide a useful forecast, I thought, it would have to be college career offices, who have a panoramic view of the entry-level economy and their own students’ anxieties. So, I placed several calls to directors of career offices at universities around the country to ask the same question: What, if anything, feels uniquely concerning about this economic moment?

One conclusion of these conversations was: We’re already worried. “We’re all holding our breath,” said Louise Jackson, director of the career center at the University of Michigan. “I think we’re at the front edge of a significant transition as it relates to labor markets and skills, and AI is already distorting the market,” said David Gaston, executive director at the career center at Georgia Tech. “The market is absolutely softening, and from what I see, it’s influenced by both economic uncertainty and AI,” said Mary Andrade, senior director of career success at Purdue University. “I have absolutely heard that some employers are already replacing new grad skills with artificial intelligence. It’s not just in the tech fields, or coding, it’s across a lot of white-collar firms.” Yikes.

Sometimes, in journalism, you go fishing for trout, and you catch a trout; your reporting uncovers exactly what you were seeking. But sometimes, when you tug on the line, a marlin’s head pops out of the water; you come into possession of information you didn’t even realize you were looking for. As I let my sources keep talking, they told me about their students, this age of anxiety, the fresh hell of looking for a job these days, and the role that artificial intelligence plays in the process. After hours on the phone with them, a new story clicked into focus. The most dramatic takeaway from these conversations wasn’t that AI was clearly destroying jobs. It was something I wasn’t expecting to hear at all: AI is shattering the process of looking for jobs.

Not-Entirely-Human Resources

When I graduated from Northwestern in 2008, I applied to 20 internships at 20 magazines, which felt like a herculean effort at the time. Two of the 20 responded. The first was Slate, which offered me a 10-week summer internship ending in September 2008. The second was The Atlantic, which offered me another internship starting in September 2008 and let me hang around for about 17 years.

Twenty years ago, it was rare for students to apply to more than 20 positions as seniors. But new technology to customize resumes and personal statements allows people to transform one application into dozens, almost instantaneously. At the same time, new hiring platforms, such as Handshake, have made it easier for young people to find hundreds of plausible jobs in the same place. “We’re now seeing students sending 300 applications a year. Sometimes it’s 500 or even 1,000 applications from one student in one year,” said Jackson. “This wasn’t possible before AI, and it’s still accelerating.”

A college senior applying to several hundred jobs—much less 1,000—is difficult for this geriatric Millennial to comprehend. But now imagine 2 million college graduates applying to an average of, say, 50 or 100 jobs. That’s 100 to 200 million job applications for entry-level positions across the country, every year. It’s impossible for carbon-based Human Resources departments to go through all that. No surprise, then, that many employers are turning to silicon, instead.

AI is now serving on the front line of Human Resources, thus somewhat confounding the very meaning of the department name. According to a LinkedIn survey of recruiters, nearly 40 percent of firms are “actively integrating” or “experimenting with” AI in the hiring process. Unilever reportedly uses video-interviewing software to analyze candidates’ facial expressions, body-language, and word choice. Hilton Hotels & Resorts uses AI-powered chatbots to screen candidates, answer questions, and schedule interviews. According to one Business Insider report, Meta plans to overhaul its hiring process to include AI bots that give interviewers “question prompts” and internal AI assistants that “judge the quality of its human interviewers.” It’s becoming common for job applicants to log onto a video interview expecting to speak to a human and then realizing the interlocutor is a chatbot. (“Can you tell me what the top salary for this position will be?” “I’m sorry, Derek, I’m afraid I can’t do that.”)

A certain economist reading along might think: What if this is good news? If AI expands the pool of potential jobs while expediting candidate evaluations, that should mean more young people finding the perfect job. In a stronger economy for entry-level work, they might be right. But in an economy where recent-grad unemployment has surged to recession levels, the AI-ification of hiring seems to have added a layer of psychological distress on top of a foundation of economic anxiety.

“Many of us predicted that the Internet would democratize the job search,” Jackson told me. But rather than simply empower job seekers and employers, AI has turned the job application process into a bizarre high-tech blitzkrieg, where an unprecedented barrage of AI-written student applications slams into HR departments, that turn to AI-enabled recruitment technology to handle the onslaught, leaving both sides feeling overwhelmed, angry, and anxious. “In my head, I imagine a data plexiglass wall, and both parties are throwing themselves at it with increasing frustration,” Jackson said.

Artificial intelligence isn’t just amplifying applications and automating interviewing, I heard. It’s weakening the link between tests, grades, and what economists call the “labor market signal” of a college degree. In a buzzy story from last month entitled “Everyone Is Cheating Their Way Through College,” New York magazine reported that professors are struggling to adapt their teaching methods in the face of a technology that can write an adequate essay on just about anything in 30 seconds. The cheating epidemic in college raises a big question for job recruitment: Why should employers trust GPA in an age of rampant AI cheating? How can employers and students trust each other during the application process? The answer in many cases seems to be: They can’t, and they don’t. “I’ve had students accused of using AI in the interview process,” one college career executive told me. “The student swears to me that they weren’t cheating, but in a virtual interview when they have access to a computer, it’s hard for the recruiter to know.”

Drenched in Artificial Intelligence

Here’s a fine place to drop a confession: I don’t hate artificial intelligence. I use ChatGPT more than I use Google. I don’t think AGI is going to imminently destroy the world. But I also think that even AI dystopians often underrate the degree to which AI is not only an economic technology, but also a social technology. It will change the way we relate to one another and, in some cases, deform the way we relate to each other.

Technologies of efficiency and convenience often remove a friction that we don’t know we need for long-term wellbeing. Staying home to watch TV and play video games while ordering in food so that you never have to leave the house is easy. Going out to meet people requires some effort. But years of replacing going-out with staying-home-to-watch-TV forms the basis of what I believe is becoming an “anti-social century”—an era of chosen solitude that’s making many of us go a little crazy. Similarly, the benefits of frictionless job hunting have to be weighed against the alienation of a job search that’s becoming not only virtual but also, at times, fully synthetic. “Our students are hungry for authentic interactions,” Andrade said. “We’re trying to lean into more employers coming to campus to meet face-to-face with students. We want humans to meet humans and not everything to be mediated by AI. But it’s hard.”

I went into my conversations with college career executives expecting to hear about AI replacing work. What I heard instead is that AI is transforming everything around work. The transition from college to the workforce is fully drenched in artificial intelligence. AI is automating homework, obliterating the meaning of much testing, disrupting the labor-market signal of college achievement and grades, distorting the job hunt by normalizing 500+ annual applications per person, turning first-round interviews into creepy surveillance experiences or straight-up conversations with robots, and, oh, after all that, maybe kinda beginning to saw off the bottom of the corporate ladder by automating some entry-level jobs during a period of economic uncertainty. This really is a hard time to be a young person.