Generative AI is already reshaping the American labor market—and young workers may be paying the highest price.
A new paper from three Stanford University researchers, released Tuesday, analyzed millions of payroll records from ADP, the nation’s largest payroll processor. The findings point to “early, large-scale evidence” that AI is having a disproportionate effect on entry-level employees.
Workers aged 22 to 25 in AI-exposed jobs—such as customer service, accounting, and software development—have experienced a 13% drop in employment since 2022. By contrast, older employees in the same roles, as well as workers in less AI-exposed jobs like nursing aides, have seen stable or rising employment. In fact, jobs for young health aides grew faster than those of their older peers.
Some front-line roles, such as production and operations supervisors, also showed gains for younger employees, though growth was stronger among workers over 35.
The study sought to isolate AI’s impact by controlling for other influences like education levels, outsourcing, remote work, and wider economic shifts. Its results suggest that while the overall U.S. job market has remained resilient post-pandemic, stagnant employment among younger workers may be tied to AI disruption.
Why are younger employees more vulnerable? According to the researchers, AI is well-suited to replacing “codified knowledge”—skills that come from formal education—while it struggles to replicate experience-based knowledge built over years on the job.
Not all AI adoption has been negative. In fields where AI complements rather than replaces tasks, the study found little to no impact on employment rates.
Still, the broader trend raises questions about the future of work. The report adds to mounting evidence that AI will replace certain jobs, fueling a debate that has divided economists, technologists, and policymakers.
Earlier this month, a Goldman Sachs economist noted that AI-driven changes were already visible in U.S. employment data—especially in tech roles and among younger staff—while also stressing that most companies haven’t yet integrated AI into everyday operations. The implication: the full impact on jobs may be yet to come.
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