Jeff DeGraff Warns AI Efficiency Push Will Eliminate Entry-Level Jobs as Graduate Unemployment Hits 5.6%
Updated
Updated · Fortune · May 20
Jeff DeGraff Warns AI Efficiency Push Will Eliminate Entry-Level Jobs as Graduate Unemployment Hits 5.6%
1 articles · Updated · Fortune · May 20
Speaking at Fortune’s Workplace Innovation Summit, University of Michigan professor Jeff DeGraff said companies using AI mainly to do work “better, cheaper, faster” are wiping out the entry-level roles that give young workers a first career foothold.
That warning lands as the early-career market weakens: 5.6% of recent college graduates aged 22 to 27 are unemployed, versus 4.2% for all workers, according to Federal Reserve Bank of New York analysis.
Handshake data adds to the pressure, showing job postings for early-career workers are down 2% from a year ago and 12% below pre-pandemic levels.
DeGraff said young people are still driving much of the most meaningful innovation, often in smaller or looser organizations, while large companies frequently buy that innovation rather than build cultures that nurture it.
Columbia professor Sheena Iyengar said Gen Z can still benefit by joining innovation-focused firms and solving real pain points, arguing that in an era of abundant AI-generated ideas, meaningful differentiation matters more.
Experts say human creativity is key, but can our education system adapt fast enough to outpace AI?
As AI erases entry-level jobs, is the traditional career ladder collapsing for an entire generation?
Graduate Unemployment Hits 4-Year High as AI Reshapes Entry-Level Job Market in 2026
Overview
Artificial intelligence is rapidly transforming the entry-level job market, as seen in recent layoffs, organizational changes, and new hiring practices. Routine tasks are increasingly automated, reducing the need for traditional junior roles and making it harder for recent graduates to find jobs that match their degrees. This has pushed underemployment among graduates to its highest level since 2020. At the same time, companies are investing more in technology due to economic pressures like higher interest rates. While AI displaces some jobs, it also creates new opportunities for those who can adapt and develop both technical and human skills.