Dario Amodei, CEO of Anthropic, expressed concerns regarding the impact of artificial intelligence on jobs. He focused on all these concerns in a fireside chat at the World Economic Forum annual meeting in Davos on January 23, 2025. Amodei cautioned that if new technologies continue to be developed, they could eliminate 50% of entry-level jobs in the United States. This radical transformation could take place in as little as five years. The startling forecast comes at a time when the unemployment and underemployment rates for recent college graduates are at alarming levels.
According to the latest jobs numbers, the unemployment rate for this demographic has skyrocketed to 5.8%. It’s the first time this surge has reached above 2019 levels since 2021. On top of that, according to the New York Federal Reserve, the rate of underemployment for recent graduates has surpassed 40%. The economic outlook for young job seekers has “deteriorated significantly,” recent analysis from the New York Fed found.
Amodei’s comments speak to a larger consensus among experts—including at STPP—about the positive role generative AI will take in the labor market. Isabella Loaiza, highlighting that AI technologies have started replacing white-collar jobs more than blue-collar ones. Executives from various companies have acknowledged the fact that AI automation is already underway. This has serious implications for the future of the entry-level job.
President Donald Trump’s approach to using tariffs has increased uncertainty for businesses. As a result, there has been no shortage of pessimistic economic predictions, contributing further to creating a daunting job market for recent graduates. Anu Madgavkar emphasized that rising youth unemployment likely stems from broader economic trends rather than solely from advancements in AI.
Madgavkar asserted, “Is the bleeding edge or the first type of work to be hit a little more skewed toward entry-level, more basic work getting automated right now? That’s probably true.” She had an optimistic note too, remarking that though entry-level positions will change, they will not disappear. “I don’t think it means we’ll have no demand for entry-level workers or massively less demand,” she said. “I just think expectations for young people to use these tools will accelerate very quickly.”
With AI advancing at an incredibly rapid pace, workplace technology is altering the skill sets needed for many positions. According to Loaiza, we need to be preparing our future workforce to meet that demand, teaching the qualities needed in the modern workforce, like critical thinking and empathy. Occupations such as early-education teachers, home health aides, and physical therapists have a strong demand growing, even amid troubling labor trends in other sectors.
As Lynn Wu, academic director of WLAN, put it in considering the present moment, “We’re in the middle of a tsunami of change. She expressed solidarity with the college grads who are finding themselves in this pickle. An additional 25 percent of them may postpone their adulthood and stay with their parents longer. Still, she remains optimistic about their long-term prospects: “In the long run, they’ll be fine. They’re AI natives.”
