There is a fear spreading across America that artificial intelligence will cause extremely high levels of unemployment in the not too distant future. This fear is heightened when the focus turns to recent college graduates.
But a recent article published by The Atlantic (Young People Are Falling Behind, but Not Because of AI, 4/2/26) refutes the claim that recent university graduates are unable to find jobs because of AI:
“The job market for young people is brutal. Is AI to blame?”
“ChatGPT was released in late 2022. Since then, the unemployment rate for recent college graduates has shot up to near 6 percent, its highest level in more than a decade, setting aside the 2020 pandemic spike. That’s true even though the overall unemployment rate is about 4 percent.”
“The case that AI is already stealing young people’s jobs is based on a statistical mirage. Historically, recent college graduates have had a much lower unemployment rate than the average worker. Since ChatGPT was released, however, the unemployment rate for this group has risen nearly twice as fast as the overall number. Because AI is best suited to replacing white-collar workers, this trend is what you’d expect to see if AI was having a labor-market impact.”
“But the unemployment rate can be a highly misleading statistic. The Bureau of Labor Statistics counts individuals as ‘unemployed’ only if they’ve actively looked for work in the past four week; otherwise, they are removed from the data set. The rationale is to avoid counting people who don’t actually want a job, such as students, retirees, and stay-at-home parents. But it also excludes people who want to work but have stopped looking for a job.”
“The economists Adam Ozimek and Nathan Goldschlag recently took a deeper look at the data and found that a significant number of young workers without college degrees had simply given up looking for a job, artificially improving the unemployment rate for young workers with a degree and thereby giving the appearance that recent college graduates were doing uniquely poorly. This is the labor-market equivalent of a school’s worst-performing students simply not showing up on standardized test day.”
“Perhaps the most compelling reason to doubt that AI is to blame for the job market is that workers at the highest risk of AI displacement aren’t seeing the worst outcome. In an August report, Goldschlag and his co-author, Sarah Eckhardt, evaluated five different measurements of which occupations were most exposed to AI-related disruption to see whether any of them correlated with changes to employment outcomes from 2022 to 2025. ‘No matter how we cut the data,’ they concluded, they didn’t ‘see any meaningful AI impacts in the labor market.’ The economist Ernie Tedeschi has shown that since 2023, unemployment for young workers has increased the most for those in occupations least exposed to AI, such as construction workers and fitness trainers. Most other studies have come to similar conclusions. ‘I’m very open to the possibility that AI could displace entry-level workers,’ Martha Gimbel, the executive director of the Yale Budget Lab and a co-author of one of these analyses, told me. ‘But we’re just not seeing it show up anywhere in the data.’”
So why can’t recent college graduates find jobs? The first reason is basic Economics 101:
“…The percentage of young people with a bachelor’s degree has risen by about a third since 2008, and most of that increase has stemmed from expanded enrollment at less selective universities. As David Deming, an economist at Harvard, pointed out, this means that the number of graduates competing for jobs has increased at the same time that the skill level of the average graduate has fallen. ‘This is the same thing that happened with high school 50, 60 years ago,’ Deming said. ‘A high-school diploma used to confer huge advantages, but then it became so ubiquitous that the advantages went away.’”
Beyond supply and demand and how diminishing talent impacts that relationship, uncertainty seems to be the main reason for college graduates being unable to find jobs.
“…The fear of an impending recession and trepidation about the outcome of the 2024 election caused companies to pause plans to make new investments, open new locations, or launch new products – all of which meant less need to hire new employees. ‘Hiring young people doesn’t bring a lot of benefits right away – it is really an investment in the future,’ Deming said. ‘So if you’re unsure about what that future will look like, then that’s one of the first things you stop doing.’”
We need to be careful not to make artificial intelligence the scapegoat for everything we determine wrong with our economy or society. There are other forces in play – always.
But what this story might suggest is the importance of making sure our learning models are designed to equip our young learners (yes, even those young learners graduating from college) the skills required to find success within the AI world.
Til tomorrow. SVB
A Better Path to Learning 
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