The New York Fed says artificial intelligence (AI) is reshaping hiring plans in ways that could squeeze job opportunities for recent college graduates.
In a new study, the Fed says that businesses reported that they’ve sharply increased AI use over the past year.
The central bank finds that the job market is already shifting with AI already driving workforce decisions among businesses. The data show that 13% of service firms anticipate AI-driven layoffs over the next six months, while nearly a quarter of companies planning to deploy AI expect to hire fewer workers as a result. The slowdown in hiring due to AI was concentrated among jobs that require a college degree.
“Looking ahead, however, layoffs and reductions in hiring plans due to AI use are expected to increase, especially for workers with a college degree.”
But for now, most companies still report keeping employees rather than job losses.
“Our results indicate AI is more likely to result in retraining than job loss, similar to our findings from last year.”
Overall, the Fed says the results of the study show that AI will have a modest impact to the job market.
“While our surveys indicate that firms using AI have made adjustments to their workforces due to AI, it is important to keep in mind that they apply only to the 25 to 40% of firms that are using it. Thus, any implied economywide labor market impacts are likely to be relatively modest, and at least so far, do not point to significant reductions in employment, particularly since employment effects can be both positive and negative.”
Last month, a Stanford study warned that the youngest workers in America’s technology sector are facing sharp job losses as artificial intelligence spreads across the workplace. The study shows that the job market has not been kind to young workers, especially those exposed in generative AI fields.