EXPERTS: AI was supposed to hit new grads hard. So far, unemployment data says otherwise.
In “The Early Impacts of AI on Employment Among Recent College Graduates,” researchers Robert Fairlie and Jane Wu said they decided to focus on recent graduates “because changes in labor demand may first appear through reductions in hiring.” As AI gets good enough to at least perform the “relatively standardized tasks” in many entry-level office jobs, they argue, firms could reduce new hiring for simpler roles rather than laying off more experienced long-term employees.
There’s some reason to believe 2026’s graduating job seekers might be more at risk of AI displacement than those graduating just a year or two prior. The CESifo researchers point to a recent sharp increase in the number of firms “replacing a large number of employee tasks with AI” in a Census survey, as well as broad increases in AI spending per employee and ChatGPT Enterprise token use in the last 12 months.
Anecdotally, some major names also think that this is the year AI is finally capable enough to start replacing the jobs of some recent graduates. Venture capitalist Marc Andreessen said earlier this year that “AI literally until December [2025] was not actually good enough to do any of the jobs that they’re actually cutting.” And BlackRock CEO Larry Fink said in March that “the speed at which AI is changing” led him to worry that “when this year’s college graduates enter the workforce, we could see the highest unemployment rate among them in years—even without a recession.”
Innovation typically destroys existing jobs, but is a net job creator in new fields. Maybe AI really is different and will drive millions out of work permanently.
I’m not sure anybody really knows.