The impact of Artificial Intelligence (AI) on the job market is expected to fall on entry-level white-collar workers, says a report by Jefferies. The report highlighted that the unemployment among recent college graduates in the United States is now at 5.8%, which is higher than the national average of 4 per cent and more than double the 2.7% rate for all college graduates.
Jefferies said, “We believe AI’s most significant impact for investors will be through labour disruption, beginning with entry-level roles”. This indicates that young people just entering the workforce are struggling more than others to find jobs.
AI is seen as one of the key reasons behind this shift. The report mentioned that Dario Amodei, CEO of AI firm Anthropic, has predicted that AI could replace 50% of entry-level white-collar jobs within the next 1 to 5 years.
He also warned that unemployment could rise sharply, even reaching 10% to 20% if the trend continues. The report also pointed out that many of the affected jobs are in fields like sales, customer support, software development, and marketing, areas where junior employees make up a large part of the workforce.
AI Shake-Up
Even technical degrees are not a safe bet any more. Recent graduates in Computer Engineering and Computer Science are among those facing higher-than-average unemployment rates, at 7.5% and 6.1%, respectively.
Interestingly, it’s not just tech companies talking about AI any more. Jefferies found that out of 419 US companies discussing AI in their earnings calls since 2021, 40% are from non-tech sectors like retail, finance, and healthcare.
Despite job losses in some areas, the report also shared mixed views from business leaders. IBM CEO Arvind Krishna said AI has helped the company invest in new roles, and total employment has actually gone up.
However, Klarna’s CEO admitted that replacing staff with AI led to poorer customer service and may force them to rehire people. Overall, the Jefferies report paints a complex picture. While AI brings opportunities for businesses to grow and improve efficiency, it also creates risks for young workers trying to start their careers.
The report suggested that companies, governments, and educators must act fast to help people gain new skills and adapt to this changing job market.
