AI is changing the workplace faster than expected; But why are young workers taking the biggest hit? Details here
A stark contrast is seen among older workers: people in their 50s gained 230,000 jobs, 173,000 of which were located in the same industries exposed to AI. The report showcases that young workers that the first rung of the career ladder can be precarious in the face of technological disruption.
Why 2022 is a focal year
The report compares employment statistics from June 2022 and June 2026. The reason why the year 2022 is used as a reference is because that is when ChatGPT was released, fueling corporate interest in generative AI. In simpler terms, ChatGPT and similar models allow computers to perform intellectual tasks which were previously done by humans.
Image credit : Pexels | AI is changing where young workers find their first jobs
For instance, a young person fresh out of university may find themselves doing basic writing, research, fact-checking or even digital work in a smaller company prior to advancing to bigger projects. With a chatbot capable of performing some of the same functions, a company may not need as many entry-level employees. Even if the chatbot does not replace an employee entirely, it can assist in making a junior worker more productive.
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IT services are bearing the brunt of the decrease in youth employment
Youth employment in IT services dropped by 31.4% between June 2022 and June 2026. IT is generally seen as a growing sector, which makes the reduction of 254,300 jobs particularly noteworthy. Other sectors which saw a decrease in youth employment included publishing (27.4% drop) and computer programming (16.6%).
The issue with decreased youth employment in IT services is not that the sector is smaller, but rather that the entry-level positions are being eliminated. In an industry where experience matters greatly, the reduced opportunities for entry-level workers will have long-term implications for youth unemployment.
Publishing is another sector where a similar situation is taking place. The sector encompasses web designers and software developers, with the latter group seeing the largest drop in youth employment. Designers continue to be in demand, but entry-level positions are being eliminated due to AI-assisted development. An inexperienced designer may be able to perform a variety of intellectual tasks which AI is incapable of duplicating, but at a lower wage than someone with prior experience. From an employer’s perspective, an entry-level worker is a temporary asset who can be laid off or asked to perform more menial tasks.
Similarly, the drop in youth employment in computer programming is not an indicator that programming is no longer in demand, but that the traditional career path is being disrupted.
A senior programmer with decades of experience may utilize AI to become significantly more productive, removing the need to hire as many junior workers. Where before a team of senior and junior programmers could work on a project together, employing AI may allow a single senior programmer to replace multiple junior colleagues. By eliminating entry-level positions, AI threatens to accelerate the pace at which workers must move up the career ladder.
While youth employment was dropping at a faster rate, older workers were gaining jobs at an equally surprising rate. Overall, people in their 50s gained 230,000 jobs between 2022 and 2026, 173,000 of which were in fields exposed to AI.
An experienced worker in a professional services field may be better equipped to utilize AI to become more productive, compared to an entry-level worker who has limited scope for growth. Furthermore, it is common across many fields for more experienced workers to deal with clients and be entrusted with more responsibility. Education appears to be a major factor in determining one’s likelihood to be displaced by AI.
Image credit : Magnific | Youth employment in IT services dropped by 31.4% between June 2022 and June 2026
According to the report, the unemployment rate for people with an undergraduate or graduate degree was, on average, 8.2% for the period of 2019-2022. For students with only secondary or junior college education, the rate was 8%. After 2022, the situation changed: the unemployment rate dropped for people with an undergraduate or graduate degree to 7%. Meanwhile, the rate dropped even further for students with only secondary or junior college education, to 5.4%. The fact that the rate dropped less for young people with higher education is an undesirable outcome for career prospects.
It is important to note that the decrease in youth employment does not necessarily have AI as its sole cause. The Bank of Korea report explicitly states that it is impossible to say with certainty whether technological progress, Korea’s declining demographics or a combination of the two is responsible for the changes in youth employment.
South Korea’s economic performance was mixed during the period of 2022-2026, with periods of recession and recovery. It is unlikely that any single factor is solely responsible for the changes in youth employment, but all are contributing.
The productivity paradox
For employers and the broader economy, it is preferable for one person to do the work of three, rather than have three people doing the work of one. This allows the most skilled and productive workers to flourish, to the benefit of the economy.
At the same time, the cost advantage afforded by laying off juniors and hiring seniors is undermined by the opportunity cost: a junior worker who is laid off may be unable to find another job. If the new employer is unable to find another entry-level worker, the young person may remain unemployed for a significant period of time. As a result, it is not clear whether increased productivity will offset the opportunity cost.
The long-term implications for the career ladder
The threat to the career ladder posed by AI is more significant than the disruption to youth employment statistics. For many professions, entry-level workers are the backbone of the broader economy. Even though such workers are not directly beneficial to the economy, they serve an important function by providing experience for the future workforce.
Junior workers in a publishing house, for instance, can eventually become senior editors or move into management. With entry-level positions being eliminated, the threat is that there will be fewer qualified workers to advance into higher positions in the future. In effect, a young person seeking to build a career in publishing will have to contend with an accelerated pace: instead of learning the industry at a steady pace, the worker will need to become more experienced and qualified more quickly.
Image credit : Magnific | Youth employment does not necessarily have AI as its sole cause
This issue is amplified by the fact that young people are often more reliant on work and less likely to have other sources of income. The promise of a stable, long-term career is especially appealing to such people. As a result, the phrase “career ladder” is inextricably linked to the opportunities for advancement for young people just starting out in the workplace.
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The implications for young workers
In many ways, the issue facing young people is one of a career ladder being removed. Unless younger workers are able to move up the career ladder at a faster pace than before, many will find themselves in a worse position than their predecessors. While many employers prefer to hire young workers, the shift to AI-assisted work threatens to remove many of the entry-level jobs.
A young person entering the workforce may find that their experience and qualifications are insufficient to secure a stable, long-term career. The most likely scenario is one in which a younger worker has to replace multiple more experienced colleagues, while also being required to perform menial tasks which a senior worker would not have needed to do prior to adopting AI. With fewer entry-level jobs and an increased need to advance quickly, young workers face a challenging future in the workplace.
