AI risks 'broken' career ladder for college graduates, some experts say

Artificial intelligence could upend entry-level work as recent college graduates enter the job market, eliminating many positions at the bottom of the white-collar career ladder or at least reshaping them, some experts told ABC News.

Such forecasts follow yearslong advances in AI-fueled chatbots, and declarations from some company executives about the onset of AI automation.

Dario Amodei, CEO of Anthropic, which created an AI model called Claude, told Axios last week that technology could cut U.S. entry-level jobs by half within five years.

When Business Insider laid off 21% of its staff last week, CEO Barbara Ping said the company would go "all in on AI" in an effort to "scale and operate more efficiently."

Analysts who spoke to ABC News said AI could replace or reorient entry-level jobs in some white-collar fields targeted by college graduates, such as computer programming and law.

Current job woes for this cohort, they added, likely owe in part to economic conditions beyond technology. Many blue-collar and other hands-on jobs will remain largely untouched by AI, they said, noting that tech-savvy young workers may be best positioned to fill new jobs that do incorporate AI.

"We're in the flux of dramatic change," said Lynn Wu, a professor of operations, information and decisions at the University of Pennsylvania. "I sympathize with college graduates. In the short run, they may stay with mom and dad for a while. But in the long run, they'll be fine. They're AI natives."

Over the early months of 2025, the job market for recent college graduates "deteriorated noticeably," the New York Federal Reserve said in April. It did not provide a reason for the trend.

The unemployment rate for recent college graduates reached 5.8%, its highest level since 2021, while the underemployment rate soared above 40%, the New York Fed said.

Youth unemployment likely stems from trends in the broader economy rather than AI, Anu Madgavkar, the head of labor market research at the McKinsey Global Institute, told ABC News

The softening job market coincides with business uncertainty and gloomy economic forecasts elicited by President Donald Trump's tariff policy.

"It's not surprising we're seeing this unemployment for young people," Madgavkar said. "There is a lot of economic uncertainty."

Still, entry-level tasks in white collar professions stand at serious risk from AI, analysts said, pointing to the technology's capacity to perform written and computational tasks as opposed to manual work.

AI could replace work previously performed by low-level employees, such as legal assistants compiling relevant precedent for a case or computer programmers writing a basic set of code, Madgavkar said.

"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," Madgavkar said. "You could have fewer people getting a foothold."

Speaking bluntly, Wu said: "The biggest problem is that the career ladder is being broken."

For the most part, however, Madgavkar said entry-level positions would change rather than disappear. Managers will prize problem-solving and analysis over tasks dependent on sheer effort, she added, noting the required set of skills will likely include a capacity to use AI.

"I don't think it means we'll have no demand for entry-level workers or massively less demand," Madgavakar said. "I just think expectations for young people to use these tools will accelerate very quickly."

Some jobs and tasks remain largely immune to AI automation, analysts said, pointing to hands-on work such as manual labor and trades, as well as professional roles like doctors and upper management.

Isabella Loaiza, a researcher at the Massachusetts Institute of Technology who studies AI and the workforce, co-authored a study examining the shift in jobs and tasks across the U.S. economy between 2016 and 2024.

Rather than dispense with qualities like critical thinking and empathy, workplace technology heightened the need for workers who exhibit those attributes, Loaiza said, citing demand for occupations like early-education teachers, home health aides and therapists.

"It is true we're seeing AI having an impact on white-collar work instead of more blue-collar work," Loaiza said.

But, she added, "We found that jobs that are very human-intensive are probably more robust."