Entry-level jobs were actually secret apprenticeships all along, and AI just cut the subsidy
Having spent a decade at the Fed, I know what the labor market looks like when policy is tightened. So, consider March 2022, when the FOMC began raising rates. Job postings for those occupations most exposed to AI peaked at the same time and began to fall. ChatGPT would not exist for another eight months.
TL;DR
- Job postings for AI-exposed occupations peaked in March 2022, coinciding with the Fed's rate hikes, suggesting monetary policy may be a factor in their decline, not just AI.
- Younger workers, with or without degrees, in occupations less exposed to AI also saw unemployment rise, questioning AI as the sole culprit.
- Entry-level jobs were essentially apprenticeships where the output of junior employees subsidized their training and development.
- AI can now perform tasks previously done by junior employees, reducing firms' investment in this training pipeline.
- Companies must stop viewing junior hiring as a cost and instead fund training deliberately to develop future professionals.
- Universities face a similar challenge, as AI can perform tasks crucial for researchers' training, necessitating a re-evaluation of educational methods.