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Business Times
3 days ago
- Business
- Business Times
Youth is losing to experience in this job market
EVERY time there is fresh evidence of labour market softness, as with the July jobs report, an obvious question is raised about the health of the US economy. Now, increasingly, economists and employees are asking a second question: Are we seeing the impact of artificial intelligence on knowledge workers? There are plenty of signs that AI is making the job market tougher for young college graduates, but for the 22 million people with jobs that are categorised as professional and business services, wage growth has actually accelerated over the past year to levels solidly above pre-pandemic rates. This suggests that the state of the labour market for white-collar workers is best described as bifurcated – one where there are both winners and losers rather than one where most workers are worse off. Despite the overall unemployment rate being a solid 4.2 per cent, conditions for young workers are soft. Only 65.3 per cent of 20- to 24-year-olds were employed last month, nearly three percentage points lower than the post-pandemic peak in January 2024, and roughly the same proportion as we saw in December 2008 following Lehman Brothers' collapse. For the millions of college graduates in the 22 to 29 age group, the unemployment rate stood at 3.7 per cent in the first six months of the year, compared with 2.8 per cent in 2019, according to US Current Population Survey data. Such numbers are backed up by numerous news reports as well as comments from corporate executives on how they see AI transforming labour needs. Internship postings this spring were down. A recent Wall Street Journal report noted that the share of entry-level roles relative to all new hires has slumped by 50 per cent since 2019 among the biggest technology companies, while another pointed to consultancy firm McKinsey putting together smaller but more experienced teams as it adds AI to the mix. It's also becoming more common for chief executive officers to talk about AI eventually leading to significant layoffs. At Meta Platforms, Alphabet and Microsoft, employee headcount grew 64 per cent between 2019 and 2022 but just 3 per cent over the past three years. This comes at a time when the three tech juggernauts collectively plan more than US$250 billion in capital expenditures over the next 12 months, suggesting that there's a tradeoff between investing in AI and hiring workers. While the number of jobs in the professional and business services' category of the non-farm payrolls data shrank slightly over the past year, wage growth accelerated to just above 5 per cent in July. Compare that with 2019, when employment growth averaged 1.3 per cent while wages rose 3.7 per cent. One explanation for this is that there are composition effects at work. If companies aren't hiring young workers, who tend to be lower paid, we're going to get lower employment growth in professional and business services along with increasing average compensation levels, which could overstate the extent to which older, more experienced workers are getting raises. But there are reasons to believe some workers really are gaining from this phase of the AI boom. There are the pro athlete-type offers being made to the select few engineers building new AI models. Outside the tech sector, there's the experience of companies such as McKinsey, where 'mediocre expertise' is going away while specialised expertise becomes more valuable in combination with AI agents. That dovetails with Nvidia CEO Jensen Huang's prediction that workers who use AI will be fine in this transition. It's reasonable for all workers to be uncomfortable with a technological innovation that hasn't disrupted most workers yet but where the ultimate outcome is so uncertain. There's no guarantee that the next generation of AI models won't come after workers with more advanced skills. It's also a far cry from the technology boom of the late 1990s, which was accompanied by broad-based employment, compensation and consumption growth. With the AI boom, it feels like the bigger it gets, the more losers there will eventually be, either from workforce disruption or a malinvestment-induced bust. Unless there are signs that it's leading to more winners than losers, this is a boom that understandably generates as much fear as it does optimism. BLOOMBERG
Time of India
23-07-2025
- Business
- Time of India
Degrees losing shine: Why are American Gen Z men saying bye to college dreams for calloused hands
For decades, a college degree was the American dream's most prized possession, a laminated promise that hard work in the classroom would translate into a seat at the professional table. But for today's Gen Z graduates, that dream is unraveling at the seams. Step into any graduation ceremony and you'll find applause, caps in the air, and proud parents brimming with hope. Fast forward a few months, and that same graduate might be hunched over a laptop, firing off résumés into the digital void, or clocking into a job that never required a diploma at all. Recent analysis by the Financial Times, using data from the US Current Population Survey, reveals a jarring reality: Young male college graduates aged 22 to 27 now have nearly the same unemployment rate as their peers without degrees according to Financial Times, July 2025. According to the Federal Reserve, the unemployment rate for recent college graduates currently sits at 5.5%, compared to 6.9% for all young workers in the same age group according to Federal Reserve Bank of New York, 2025. Once a reliable ladder to economic mobility, a college degree is now being met with shrinking returns, and growing disillusionment. Same degree, same struggle Just over a decade ago, the post-recession job market painted a very different picture. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 15 most beautiful women in the world Undo In 2010, young men without college degrees faced unemployment rates above 15%, while their college-educated peers were closer to 7% (US Bureau of Labor Statistics, 2010). That educational edge has since eroded. The reasons are twofold. First, employers are quietly dropping degree requirements for many entry-level jobs, particularly in tech, logistics, and customer service roles, according to Harvard Business Review, 2023. Second, the proliferation of college graduates has diluted the exclusivity of a bachelor's degree, making it less of a differentiator in the hiring process. As a result, Gen Z men are increasingly finding themselves jobless despite their degrees, or employed in roles that don't require one. The gender gap in joblessness While college-educated men face rising unemployment, their female counterparts are faring better. According to the Financial Times analysis, only about 4% of college-educated women aged 22–27 are unemployed, compared to 7% among similarly educated men, according to a recent Financial Times report. The gap is partly explained by the growth of sectors like healthcare, which tend to employ more women and are among the fastest-growing fields in the US economy. The US Bureau of Labor Statistics (BLS) projects that healthcare occupations will add about 1.9 million job openings annually over the next decade (BLS Employment Projections, 2024–2034). Moreover, healthcare is viewed as recession-resistant, a trait that has become especially attractive in a post-pandemic world (Indeed Career Insights, 2023). Experts also point to differences in how men and women approach the job search. Women are often more flexible, willing to accept part-time, temporary, or less-than-ideal roles to gain experience or financial stability. Men, on the other hand, are more likely to hold out for roles that match their ideal career vision, which may result in longer periods of unemployment. NEET status and the emotional cost The acronym NEET—Not in Employment, Education, or Training—has become a growing concern. Roughly 11% of Gen Z youth now fall into this category, with young men disproportionately represented according to Pew Research Center, 2024. This group often includes college graduates who, after months or years of fruitless job hunting, disengage from both professional and educational pathways. Many face emotional exhaustion, loss of motivation, and long-term economic consequences. While often misunderstood as apathetic or unambitious, NEET youth are frequently the product of a broken system—one that over-promised and under-delivered. Skilled trades: The rebellion in steel-toed boots Faced with bleak prospects and mounting debt, a growing number of Gen Z men are charting a different course: vocational trades. Between 2011 and 2022, the number of college students in the US dropped by 1.2 million, with nearly 1 million of that decline attributed to male students, according to a Pew Research Center analysis in 2023. At the same time, enrollment in two-year public vocational programs surged by over 20% since 2020, adding more than 850,000 students, per the National Student Clearinghouse Research Center (NSCRC, 2024). These trade programs—training students in plumbing, carpentry, automotive repair, and electrical work—are not only less expensive than four-year degrees, but often lead to high-paying, stable careers. The median wage for skilled trade workers in certain fields now rivals or exceeds that of many college-educated roles as mentioned in the US Department of Labor, 2024. Degrees aren't dead—but they're no longer sacred None of this suggests that higher education is obsolete. Degrees still matter, for certain fields and career tracks, they remain essential. But the myth of the guaranteed payoff is gone. And Gen Z men are no longer buying in blindly. What we are witnessing is not the death of education, but the recalibration of value. In a post-pandemic, AI-disrupted, inflation-torn economy, young people are prioritizing return on investment, and four-year degrees, for many, simply aren't delivering. This shift is a generational correction, not a crisis. It's a recognition that the path to success may no longer be paved with parchment, but with practical skills, economic independence, and the confidence to defy tradition. Ready to navigate global policies? Secure your overseas future. Get expert guidance now!
