AI isn't to blame for the graduate jobs crisis

Telegraph

2 days ago

You should think about being a powerboat driver. Or perhaps a railway builder. Or, although it might not be great for your online dating profile, a sewage worker. On absolutely no account should you consider anything that requires a degree.
Microsoft last week released a study of the careers that are most likely to survive the rapid rise of artificial intelligence (AI). It joins a whole series of reports pinning the blame for the graduate jobs crisis on super smart chatbots.
But while there is a desperate shortage of vacancies out there, it is the Government that is to blame and AI is just a convenient excuse.
If you graduated from university this summer, being a sewage worker was probably not vying with law, consulting or finance as your top career choice. According to Microsoft, however, perhaps you should be thinking about it after all.
After examining 200,000 conversations with chatbots to determine which roles were most at risk from the rise of AI, it concluded that historians, translators and sales reps were the most likely to be replaced by machine, along with anything that traditionally required a degree.
By contrast, blue-collar jobs were a lot safer, with pile drivers and dredge operators up there with the sewage guys at the very top of the 'safe for life' list. It turns out the chatbots don't want to get their hands dirty any more than the rest of us.
It joins a host of reports pinpointing AI as the explanation for the terrifying collapse in graduate recruitment. The online jobs board Adzuna said only last month that the number of entry-level jobs on offer in May was down 32pc from three years ago, before ChatGPT and all its rivals were released.
Meanwhile, we have now learnt that 'Mickey Mouse' degrees are paying less than ever. Figures released this week showed that 630,000 graduates are now collecting benefits, which hardly suggests their careers are accelerating into the fast lane. All those student loans are unlikely to be paid back.
There is no question that the job market for new graduates is grim right now. It has always been tough to get your foot on the career ladder, but right now it is harder than ever.
But should we really blame AI for that? In fact, there is a far simpler explanation. It is the Government that has no idea how the economy works that is the real problem.
Over the year since it took office, the Labour Government has made employing someone, and especially a new graduate, about as unattractive as it possibly could be.
In her first Budget, Rachel Reeves, the Chancellor, imposed a steep rise in the rate of National Insurance that employers have to pay, while reducing the threshold at which it starts to kick in. If you put a big new tax on jobs it should not come as any surprise if, not long afterwards, there are fewer of them. That is what happens.
Next, the reform of employment legislation by Angela Rayner, the Deputy Prime Minister, has made it harder to sack anyone if they don't work out. In the graduate jobs market in particular, companies want to try people out and figure out if they have the skills and attitude for the working world before offering them a full-time position. But that is no longer possible.
If you hire a 22-year-old now, you are stuck with them for 40 years, no matter how completely hopeless they are, or else you have to pay a huge bill for getting rid of them. The flexibility has gone, and the safest thing to do is not to hire anyone in the first place.
Finally, the economy has been crushed by taxes and regulations. Output shrank again last month, and with yet more tax rises likely to be imposed in the autumn, we may soon be in a full blown recession. The Institute of Directors reported on Friday that business confidence had fallen to its lowest level on record, below even the levels reported during the Covid pandemic.
With the outlook so bleak, the easiest thing for any company to do is simply to slash graduate recruitment. If you are not planning to expand, you don't need the extra people anyway, and at least it will save some money.
Over time, AI will almost certainly change the labour market, and potentially radically so. It will automate a lot of routine white collar work, and that may eliminate some jobs.
We should however, keep two points in mind before falling for too much of the hype. To start with, we have a couple of hundred years of industrial history to tell us that new technologies don't ever lead to a reduction in the overall amount of work available. We just find new stuff to do that we had not thought of before.
And, just as significantly, it is surely far too early to see the impact on employment. Most companies are experimenting with AI and trying to figure out where it can help them. But very few of them have yet got to the stage of replacing their workers in droves. They don't trust it enough yet, and probably rightly so.
The blunt truth is this. The Government has taken a wrecking ball to the jobs market. It has punished employers with tax rises, crushed the market with regulations, and killed growth stone dead.
Against that backdrop, it is easy to blame AI for the shortage of graduate jobs. But it is really just a convenient excuse. It is destructive government policies that are really to blame. And we should focus on fixing that before telling all the English, philosophy and history graduates this summer to send their CVs straight to the sewage works.