Is AI Eating Jobs for Recent College Grads? Derek Thompson’s Analysis and How to Stay Ahead

s artificial intelligence (AI) already gobbling up job opportunities for recent college graduates? It’s a question that’s got economists, employers, and grads on edge. In his sharp analysis for

The Atlantic in April 2025, Derek Thompson dives into this issue, spotlighting new research that suggests AI is indeed taking a bite out of entry-level jobs in certain fields. A key Stanford University study, alongside other data, backs this up, but the story isn’t all doom and gloom.

Young people can adapt to thrive in this shifting job market. Let’s explore Thompson’s take, the research behind it, and three practical steps grads can take to stay competitive.

The Research: AI’s Impact on Grad Jobs

Thompson highlights a 2025 Stanford study by economists Erik Brynjolfsson, Bharat Chandar, and Ruyu Chen as some of the strongest evidence that AI is reducing jobs for recent graduates.

Using payroll data from millions of workers, the study found that young workers aged 22–25 in “highly AI-exposed” roles—like software developers and customer service agents—saw a 13% employment drop since large language models like ChatGPT emerged.

Meanwhile, older workers and less AI-exposed roles, like home health aides, held steady or grew.

The study shows AI hits hardest at jobs where it can fully replace tasks (e.g., writing basic code) but has less impact on roles where it assists with complex tasks (e.g., strategic planning).

This automation-augmentation divide explains why entry-level grads, often tasked with routine work, are most vulnerable.

Thompson also points to the New York Federal Reserve, which reported in 2025 that labor conditions for recent grads have “deteriorated noticeably,” with their unemployment rate at a high 5.8%.

He introduces the “recent-grad gap”—the difference between grad and overall unemployment—which hit an all-time low, signaling a uniquely tough market for young degree-holders.

As Harvard economist David Deming told Thompson, AI excels at tasks like synthesizing data or producing reports, which young grads often handle in white-collar firms.

Broader Research: A Nuanced Picture

Other studies add layers to Thompson’s analysis. A 2025 Economic Innovation Group report found little evidence of AI-driven job losses across the economy, and economist Noah Smith argued AI isn’t broadly impacting grad jobs.

A 2024 study from China (Huang & Wang, 2024) even showed AI boosting jobs in labor-intensive sectors by enhancing productivity.

However, the Stanford study’s focus on young workers in specific roles reveals a trend broader analyses miss.

A 2025 MIT report (Fortune, 2025) notes that 95% of AI projects fail, suggesting some job cuts may stem from overhyped expectations rather than AI’s actual capabilities.

Thompson also cites a 2024 San Francisco Federal Reserve study, which found the college wage premium stopped growing around 2010, hinting that structural shifts—beyond AI—are making degrees less of a sure bet.

He adds that a surge in law-school applications, echoing the Great Recession, signals grads are seeking graduate school as a fallback amid job market stress.

Is AI Eating Grad Jobs? The Verdict

Thompson’s analysis, backed by Stanford’s 13% employment drop and the Federal Reserve’s 5.8% unemployment rate, suggests AI is eating away at grad jobs in roles like software development, where routine tasks are easily automated.

The recent-grad gap’s historic low supports this, indicating firms may be using AI for tasks like paralegal work or basic coding, shrinking entry-level opportunities. But it’s not a total crisis—jobs requiring human judgment or physical presence, like healthcare or strategy, are holding strong.

Thompson notes other factors, like post-pandemic recovery or 2022 interest rate hikes (which cut tech job openings by over 50%), also contribute. AI is reshaping, not destroying, the entry-level job market.

What Young People Can Do: Three Practical Steps

Thompson’s analysis and the research offer a roadmap for grads. Here are three actionable steps to navigate the AI-driven shift:

Master AI Tools: The Stanford study noted senior workers often outshine juniors in using AI tools like GitHub Copilot or Claude. Grads should learn these tools to boost productivity—whether coding, drafting reports, or analyzing data. With universities lagging, try online platforms like Coursera, edX, or YouTube tutorials. For example, a computer science grad could use AI to automate repetitive coding tasks, making them more valuable.

Focus on AI-Resistant Skills: Jobs needing human judgment or physical presence—like teaching or healthcare—are less AI-vulnerable, per Stanford’s findings. A 2024 University of San Diego report highlights roles like therapists or project managers, which rely on empathy or creativity. Grads should explore fields blending technical and human skills, like user experience design, and hone soft skills like communication.

Stay Curious and Flexible: Thompson emphasizes watching the present to anticipate the future. Track trends on platforms like X, read industry reports, or follow studies like Stanford’s. If you’re in an AI-exposed field like software engineering, pivot toward tasks like designing systems where humans excel. Stay open to new roles or industries as opportunities shift.

Derek Thompson’s analysis, grounded in Stanford’s 13% employment drop finding and the Federal Reserve’s 5.8% unemployment rate, shows AI is taking a bite out of grad jobs in automatable roles like software development.

But less-exposed jobs and tasks needing human judgment are thriving. Grads can fight back by mastering AI tools, prioritizing AI-resistant skills, and staying adaptable. As Thompson suggests, keeping your eyes on the present is the best way to navigate what’s next in this AI-driven job market.

References

• Brynjolfsson, E., Chandar, B., & Chen, R. (2025). The Impact of AI on Employment: Evidence from Payroll Data. Stanford University.
• Huang, J., & Wang, Y. (2024). The impact of artificial intelligence on employment: the role of virtual agglomeration. Humanities and Social Sciences Communications.
• University of San Diego. (2024, February 21). Ways AI Impacts the Job Market and Employment Trends. onlinedegrees.sandiego.edu.
• MIT Report. (2025, August 21). An MIT report that 95% of AI pilots fail spooked investors. Fortune.
• Federal Reserve Bank of New York. (2025). Labor Market Update for Recent College Graduates. [Note: Placeholder citation, as specific report details are not provided.]
• Thompson, D. (2025, April). The job market is frozen. The Atlantic.

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