A Stanford study has found evidence that the widespread adoption of generative AI is impacting the job prospects of early career workers.
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The rise of generative AI isn’t just a tech buzzword – it’s a potential disruptor shaking up the American labor market, particularly for those just starting their careers. A new study from Stanford University researchers, released Tuesday, suggests that the AI revolution is already leaving its mark, with entry-level workers facing a disproportionate impact.
The analysis, leveraging payroll data from ADP, the nation’s leading payroll software provider, paints a concerning picture. Researchers examined millions of records to uncover emerging trends in the wake of AI’s growing influence.
Their findings reveal “early, large-scale evidence” supporting the hypothesis that AI is significantly impacting young professionals entering the workforce. The numbers tell the story: since 2022, employment among workers aged 22 to 25 in AI-exposed sectors like customer service, accounting, and software development has plunged by a notable 13%.
In stark contrast, more seasoned workers in the same AI-exposed fields, and workers of all ages in less AI-vulnerable occupations like nursing aides, have experienced stable or even growing employment rates. For instance, jobs for young health aides have seen greater growth compared to their older counterparts.
Even in areas like front-line production and operations supervision, where young workers have seen some employment growth, the increase remains smaller compared to those over 35.
While the potential impact of AI on the job market has been a generalized concern, this Stanford study suggests the effects will be far from uniform, creating winners and losers based on age and sector.
The researchers diligently worked to isolate the impact of AI, controlling for other factors like education level, remote work trends, outsourced jobs, and broader economic shifts that could influence hiring decisions.
The study proposes that these findings may help explain the perplexing stagnation in national employment growth for young workers, even as overall employment has largely remained resilient since the pandemic, despite recent signs of economic softening. This divergence suggests AI is adding a layer of complexity to the labor market dynamics.
One key vulnerability for younger workers, according to the research, is AI’s ability to replace “codified knowledge,” essentially the “book-learning” acquired through formal education. Conversely, AI may struggle to replicate the nuanced expertise and experiential knowledge accumulated over years on the job.
Interestingly, the study also highlights that not all AI applications lead to job losses. In occupations where AI acts as a complement, boosting efficiency and supporting existing workflows, employment rates have remained relatively stable.
The study, while not yet peer-reviewed, adds further fuel to the ongoing debate about AI’s potential to displace jobs. The narrative isn’t simply about automation eliminating roles; it’s about shifting the skills landscape and creating new demands that disproportionately favor experienced professionals.
Earlier this month, a economist noted that the labor market dynamics shaped by generative AI were becoming increasingly apparent, particularly within the tech sector and among younger employees.
He also, crucially, pointed out that the majority of companies are still in the early stages of AI deployment, implying that the full impact on the job market is yet to be felt. The implications are clear: the AI revolution is just getting started, and its effects on the workforce, and particularly on those entering it, will likely continue to evolve – and demand careful attention.
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