International Monetary Fund (IMF) Managing Director Kristalina Georgieva warned at the IMF and World Bank Annual Meetings in Bangkok that young workers entering the labor market face the highest risk from artificial intelligence as entry-level, routine positions rapidly disappear.
Key Takeaways:
- IMF projects AI will affect 40% of global jobs, including 60% in advanced economies and 23% in low-income nations.
- Employment of workers aged 22 to 25 in AI-exposed roles fell 12% between November 2022 and April 2026.
- Starting pay for graduates in the most AI-exposed majors declined 13%, driven partly by moves into lower-wage sectors.
- Unemployment among recent college graduates reached 5.7% in June 2026, compared to 4.1% across the general workforce.
Stanford and Fed Data Reveal Contracting Youth Employment
Data from Stanford Digital Economy Lab and ADP Research indicates that between November 2022 and April 2026, employment for 22- to 25-year-olds in highly AI-exposed jobs declined by 12%. Conversely, employment for the same age group grew 7% in roles with low AI exposure. The study found almost no gap in employment growth for workers aged 31 and older, pointing to reduced entry-level hiring rather than active layoffs as the primary cause of the decline.
A US Census Bureau paper published in September confirmed that starting salaries for graduates in the most AI-exposed majors fell 13%. Approximately half of this reduction occurred as graduates accepted employment in lower-wage industries such as retail and food service. Furthermore, Federal Reserve Bank of New York figures showed recent graduate unemployment at 5.7% in June 2026, well above the 4.1% national rate for all workers. The unemployment gap between recent graduates and the general workforce reached 1.8 percentage points in April 2025, marking the widest margin since at least 1990.
Global Impact and Policy Responses
Speaking on the panel, Singapore President Tharman Shanmugaratnam noted that demand for college graduates in the US has dropped for the first time in a century, with the steepest declines in the tech sector. He urged governments to institutionalize COVID-era hiring incentives to encourage firms to retain early-career talent. The trend comes as corporate adoption accelerates across industries, mirroring broader enterprise trends where Epic Games mandated AI coding and AI guidance takes center stage in corporate earnings.
However, market observers remain divided on the direct impact of automation. David George, a partner at Andreessen Horowitz, argued that assertions regarding widespread AI-driven job destruction still lack conclusive empirical proof.
Why It Matters
The contraction of entry-level positions threatens the traditional structure of career progression, forcing young professionals into lower-paid service roles and delaying skill accumulation. As enterprises integrate automated workflows to increase margins, the loss of foundational roles could destabilize long-term talent pipelines across high-tech and corporate sectors. Policymakers and educational institutions will likely need to re-evaluate higher education models and corporate hiring incentives to mitigate rising youth underemployment.
