Artificial Intelligence was previously regarded as a means to handle tedious, repetitive tasks—those chores that few wished to undertake. However, in a remarkably short span, it has evolved into something significantly more substantial.
A recent study conducted by Stanford University indicates that AI is already transforming the labor market in the United States. This impact is not uniform; the youngest employees, particularly those aged 22 to 25, appear to be bearing the brunt of these changes.
The research, spearheaded by esteemed economist Erik Brynjolfsson, utilized high-frequency payroll data from ADP, the nation’s largest payroll processor. This approach provided researchers with a clear and immediate understanding of how generative AI is affecting job roles and employment trends.
The findings of the study are as follows.
AI is currently displacing entry-level workers
The Stanford study identified a 13 percent relative decline in employment among early-career individuals, specifically those aged 22 to 25, in positions most susceptible to AI since late 2022, coinciding with the widespread adoption of tools like ChatGPT and Copilot.
“These large language models are trained on books, articles, and written content sourced from the internet and other venues,” Brynjolfsson stated in an interview with CBS MoneyWatch. “This type of academic learning is what many individuals acquire at universities before entering the workforce, resulting in considerable overlap between these LLMs and the knowledge possessed by young adults.”
Conversely, older employees engaged in more practical, hands-on roles experienced an increase in employment ranging from 6 percent to 9 percent. Similar trends were observed in sectors such as accounting, auditing, administrative tasks, computer programming, and even sales.
“Older workers possess a wealth of tacit knowledge, having acquired practical skills through experience that may not be documented anywhere,” Brynjolfsson elaborated. “They hold insights that are absent from the LLMs, which is why they are not being replaced to the same extent.”
This trend is also reflected in reports from investment banks such as Goldman Sachs and Bank of America, which indicate that the economic advantage of possessing a college degree is diminishing in industries heavily influenced by AI, resulting in many recent graduates facing challenges in distinguishing themselves in the job market.
What can young individuals do?
Stanford’s report does not present a wholly negative outlook. Researchers discovered that job opportunities are increasing in fields where AI is utilized to enhance workers’ capabilities rather than to automate their responsibilities.
For instance, consider employees who leverage AI to conduct research on a subject or to verify their work upon completion. These individuals are generally at a lower risk compared to those who delegate entire tasks to AI systems.
For Brynjolfsson, this differentiation is vital. “I think it’s fair to say that technology has always been destroying jobs and always been creating jobs,” he remarked. “If we aim to foster not only higher productivity but also broadly shared prosperity, employing AI to augment rather than solely automate work is a promising path to pursue.”
Experts support this perspective. Numerous individuals, including CEOs focused on AI, contend that workers who adapt their skills to integrate with AI, instead of resisting it, have the greatest likelihood of remaining relevant in rapidly evolving industries.
Moreover, while there are concerns that AI might lead to a decline in wages, the study reveals that salaries across various age demographics have largely remained stable. The more significant challenge, particularly for newcomers, is the reduced number of job openings rather than decreasing salaries.
For young job seekers, the takeaway is straightforward: do not attempt to outpace AI; instead, learn to collaborate with it.
