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

Here is yet another manifestation of disintermediating main stream media. Derek Thompson, co-author of the recently published impactful book “Abundance” and one of the finest writers to have written for The Atlantic over the past 17yrs, just quit the magazine publisher to start his own Substack. And in his first post , he explains why he did what he did.

But this post is something related to what we at Marcellus have been highlighting in our recent blogs and podcasts – the threat that young people across the world face from AI eating away jobs.

Derek Thompson begins with a startling chart: “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.”

Whilst he acknowledges that there are other factors at play here, he 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.”

A recent quote by Amazon’s CEO Andy Jassy about how AI will eliminate jobs at Amazon went viral. Thompson adds: “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.”

To dig deeper, Thompson interviewed placement officers at colleges and what he found was that more than AI disrupting jobs, “AI is shattering the process of looking for jobs.”

Whilst college kids use AI to generate hundreds of job applications, recruiters in turn are using AI for screening process: “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.”

He goes on to elaborate on other aspects of AI’s disruption of the labour economy before concluding as follows: “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.”