Youth can't find jobs, but AI isn't to blame — expert opinion

According to the economist’s data, unemployment among first-time job market entrants in the US has increased by more than 2.5 percentage points since 2023. Meanwhile, the unemployment rate among older workers has remained virtually unchanged.

At first glance, this might appear to be the result of aggressive AI implementation supposedly displacing young professionals. Many business leaders indeed speak of AI as a cost-cutting measure.

However, Perkins' analysis shows the opposite: the cause of youth unemployment appears to lie elsewhere. «Companies simply aren’t hiring,» the economist writes. Current job creation levels in the US correspond to «recessionary» conditions and affect all industries, not just those where AI is more prevalent. Those sectors aren’t experiencing higher unemployment rates.

The research identifies three key factors behind the hiring decline—none of them related to automation. First, companies rapidly expanded their workforces after the pandemic and are now reducing hiring to more typical levels. Second, businesses are wary of political uncertainty and hesitant to increase headcount.

Third, Trump-era tariffs have squeezed profits and are forcing employers to demand more from existing employees rather than hire new ones.

These trends are especially painful for young people, but overall employment remains stable. Perkins notes that once the economy gains momentum again, hiring will recover—along with prospects for graduates.