U.S. Unemployment Holds Steady, but a Closer Look Sparks Some Concerns
The July 2025 unemployment rate of 4.2% nationwide continued to show little change since April 2025 according to the recently released report by the U.S. Bureau of Labor Statistics (BLS). However, hiring in July was softer than expected and there were sharp revisions that “slashed the number of jobs created in the prior two months.” Furthermore people in the job market are remaining unemployed for a longer duration as the median length of unemployment ticked up for the second consecutive month to a seasonally adjusted 10.2 weeks, representing a 7.4% increase over the 9.5-week median in July 2024; and the number of people unemployed for at least 27 months reached a seasonally adjusted 1.826 million, “the highest level since 2017, not counting the pandemic’s unemployment surge” according to the article by the Wall Street Journal. Although the number of discouraged workers decreased by 212,000 in July — a subset of the marginally attached who believed that no jobs were available for them, “economists say lower participation in the labor force is helping to keep the unemployment rate low, but also masking an increasingly dismal climate for job seekers.” Another surfacing concern comes at a time when companies are embracing an increasing use of artificial intelligence (AI), creating heightened challenges for recent college graduates to secure a job and “find a foothold on the career ladder.” College grads have typically been in high demand for entry level jobs, but AI is replacing those responsibilities leaving new graduates “competing for fewer [job] slots” while also increasingly competing “against junior workers who have been recently laid off.” According to reported findings by venture capital firm SignalFire, “among the 15 largest tech companies by market capitalization, the share of entry-level hires relative to total new hires has fallen by 50% since 2019.
This developing trend is leading to a decline in the hiring and training of fewer young people, raising concerns that it “may also be shrinking the pool of workers that will be ready to take on more responsibility in 5 or 10 years.” Companies have begun “rethinking how to develop the next generation of talent, since much of the drudgework that was typically passed on to entry level positions helped teach a person critical skills along the way have been eliminated by AI. At some companies, junior hires are now required to go through AI training to be able to check the accuracy of its output, since “what any users know to be true: it still struggles in some cases to do the work of humans effectively.” Rebecca Price, at New York venture capital firm Primary Venture Partners reportedly pointed out that “it’s not that there are no entry-level jobs, but that there’s a gap between the skills companies expect out of their junior hires in the age of AI;” and that “new grads must also learn faster and think more critically.” Meanwhile, in response to observing the AI replacement of entry level jobs at some of the companies her firm SemberVirens invests in, venture capitalist Allison Baum Gates told the Wall Street Journal, “Maybe I’m wrong and this leads to a wealth of new jobs and opportunities and that would be a great situation,” she said. “But it would be far worse to assume that there’s no adverse impact and then be caught without a solution.”
Source: https://www.wsj.com/lifestyle/careers/ai-entry-level-jobs-graduates-b224d624