Economist Indicates Job Market Woes for Graduates Stem from Economic Factors, Not AI
Economist Brad DeLong attributes recent college graduates' job struggles to economic factors, not AI.
Key Points
- • Brad DeLong argues job struggles for graduates are due to economic factors, not AI.
- • Policy uncertainty has led to significant hiring freezes among employers.
- • The unemployment rate for college graduates diverges significantly from general unemployment, reaching record highs.
- • Investment in AI by companies is limiting entry-level hiring opportunities.
Recent college graduates continue to struggle in the job market, but economist Brad DeLong emphasizes that these challenges are rooted in economic factors rather than the rise of artificial intelligence (AI). In his analysis, he argues that sluggish economic conditions coupled with widespread policy uncertainty are the primary culprits behind hiring freezes.
Despite a low overall unemployment rate in the U.S., the jobless rate among recent graduates has reached record highs, highlighting a significant divergence from general employment figures. DeLong illustrates that employers are displaying risk aversion, delaying hiring decisions due to unpredictable government policies concerning trade, immigration, and inflation.
"The gap between college graduate unemployment and general unemployment is at record highs," DeLong reported, reflecting a troubling trend for new entrants into the labor force. Companies, particularly in tech, are investing in AI infrastructure instead of expanding their workforce, which solidifies a cycle of limited entry-level opportunities.
Moreover, traditional views asserting a "safety premium" associated with a college degree are weakening, with Goldman Sachs noting a diminishing value for recent graduates in a labor market that appears healthy overall. DeLong aligns his concerns with those of other experts like Paul Krugman, underlining that the job market issues should be attributed to economic and policy uncertainties, rather than an overreliance on AI technologies.
DeLong's insights suggest a considerable shift in labor market dynamics, potentially foreshadowing challenges in the long-term value of a college degree in securing employment. He concludes that graduates' job market struggles reflect broader economic vulnerabilities beyond mere technological advancements.