Economists Say AI Is Impacting Young People’s Employment Market
Warning signs: Is AI replacing early-career professionals in the workforce? According to a recent Stanford Digital Economy Lab analysis, employment for 22- to 25-year-olds has drastically decreased in the fields most affected by AI automation, such as software engineering and customer support. According to the report’s authors, the figures support growing anecdotal evidence that college graduates in particular professions are having difficulty finding employment and act as “canaries in the coal mine,” alerting society to the potentially disruptive consequences of artificial intelligence on the labor market in the future.
Data from ADP, the biggest payroll software supplier in the US, which records millions of workers across tens of thousands of businesses, is used in the Stanford study, which was released today. Co-author Erik Brynjolfsson, an award-winning economist and the head of the Stanford Digital Economy Lab, tells TIME that although other earlier studies have been more focused, this is the “largest scale, most real-time effort” to measure AI’s effect on labor markets to far.
Diverging paths: Overall employment has expanded significantly since late 2022, when OpenAI’s ChatGPT swept into the public eye, according to the statistics. Even when firm-level effects are taken into account, early career professionals in the most AI-exposed industries, such as software engineering, marketing, and customer service, have seen a 16% relative loss in employment.
Workers in more manual labor-intensive occupations, such as cab drivers, maintenance personnel, and health aides, have seen employment either remain the same or even increase. “Seeing such a sharp effect for some categories and not others was really striking,” Brynjolfsson adds.
Brynjolfsson did not state outright that AI was the primary cause of unemployment. But he adds he and his team were able to rule out alternative theories, such as that the alterations were caused by changes in education or remote work brought on by COVID-19. Our results support the premise that AI is affecting the labor market in this way, particularly for entry-level workers, according to co-author Bharat Chandar.
A way ahead: there is some optimism in Stanford’s findings. The employment rates of older people in professions with high AI exposure are keeping steady, according to ADP statistics. For instance, employment in the highest AI-exposure categories increased by 6–12% for people aged 30 and older between late 2022 and May 2025. This may indicate that older employees possess implicit knowledge that AIs find difficult to imitate, or that they are more powerful inside their organizations and are therefore more difficult to fire.
Additionally, the researchers discovered that jobs in occupations where AI is used to enhance rather than automate labor are increasing. Workers who are requested to assign full jobs to AI, for example, are less likely to be replaced than those who use AI to learn about topics or assess their work after it has been completed.
This suggests to Brynjolfsson that, with careful application, AI may have a favorable economic impact. “I believe it’s reasonable to say that technology has always been both creating and destroying jobs,” he adds. “Using AI to augment rather than just automate work is a good direction to go if we want to create greatly shared prosperity in addition to increased productivity.”
Artificial Intelligence in Action
According to Brynjolfsson and Chandar, AI was utilized at every stage of the creation of the aforementioned paper: to develop code to process and clean the ADP data; to supply references that allowed them to verify their assertions; and to “assist with some of the writing,” according to Chandar.
Additionally, they created and modified the paper’s visual graphs using AI. Each time a graph was created, I or another reader would provide the following suggestion: “What if you did this way? Brynjolfsson remarks. That would have been a major annoyance back then. But AI allows you to accomplish it much more quickly.
“We used AI ourselves, which is one of the reasons we were able to complete this paper so quickly and effectively,” he continued. Without a doubt, this was an augmentative usage of it.
Who to Know: Josh Vlasto
Persuasion strategies — In 2024, the cryptocurrency business placed a significant wager, hoping that by investing more than $100 million in congressional elections and exerting as much pressure as possible on politicians to endorse cryptocurrency, they would lead to legislation that would benefit the sector. Many of their preferred politicians won, and this year’s crypto-friendly measures have made it through Congress, demonstrating the strategy’s enormous success.
Currently, a number of influential members of that movement are using comparable AI playbooks. Vlasto, a political strategist, and Chris Lehane, who currently oversees worldwide policy at OpenAI, are among them. Vlasto is a key figure in Fairshake, the cryptocurrency super PAC at the heart of the sector’s political campaign. He currently serves as a co-leader of Leading the Future, a similar AI super PAC.
AI tug of war- According to a statement Vlasto gave, Leading the Future would “support candidates aligned with the pro-AI agenda” and “oppose policies that stifle innovation.” With the help of investors like Greg Brockman, president of OpenAI, and Andreessen Horowitz, a significant supporter of Fairshake, the organization has already raised $100 million.
Fairshake’s political scheme was seen by many crypto skeptics as the epitome of regulatory capture following Citizens United, as a small minority with a significant financial stake in a fringe innovation converted it into a legislative priority. However, their efforts were clearly effective, and AI now has the resources and know-how to attempt to enact regulations that would benefit it. Many legislative initiatives are being undertaken in many states to control AI firms and lessen the negative effects of AI. Undoubtedly, Vlasto and his associates will attempt to thwart their attempts with their enormous war fund and political acumen.
