Young people aren't getting hired, but it's not because of AI

"Young people entering the job market are facing the toughest conditions in years - but artificial intelligence isn't the reason. A new analysis from a London-based economics consultancy suggests something much more old-fashioned is going on: Companies simply aren't hiring. Since 2023, unemployment among new entrants to the US labor force has jumped more than 2.5 percentage points - a sharp contrast with older workers, whose jobless rates have remained flat, according to the analysis from Dario Perkins, a managing director at Global Data.TS Lombard."

""For the AI maximalists, this is 'proof' that companies are deploying the technology rather than hiring graduates. And it is also consistent with what business leaders are saying, with 'AI' now a synonym for 'cost cutting,'" wrote Perkins. But Perkins argues the real reason is simply the normal course of business. "US hiring is weak across the board. In fact, the economy as a whole is currently experiencing recessionary levels of job creation," he wrote."

"The report identifies three main drivers behind the hiring slowdown - and none involve automation replacing workers. First, firms rapidly expanded their workforces during the post-pandemic surge and are now normalizing head count. Second, policy uncertainty has made businesses cautious about taking on new staff. Third, Trump-era tariffs have squeezed profit margins, prompting companies to push for more output from existing employees instead of hiring"

Unemployment among new entrants to the US labor force rose more than 2.5 percentage points since 2023, while jobless rates for older workers remained flat. Sectors with higher exposure to artificial intelligence did not see larger unemployment increases. Overall US hiring is weak across industries, with job creation at recessionary levels. Three main drivers explain the slowdown: firms are normalizing head counts after rapid post-pandemic expansion; policy uncertainty has reduced hiring willingness; and Trump-era tariffs have squeezed profit margins, prompting firms to extract more output from existing employees instead of hiring. Automation is not identified as the primary cause.

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