Remote Work, Not AI, Stalls Gen Z Job Prospects

It's tempting to point the finger at artificial intelligence for the employment woes of Gen Z. However, recent insights from the New York Fed suggest a different culprit: remote work. This shift, accelerated by the COVID-19 pandemic of 2020, is emerging as a significant hurdle for those entering the job market.

Remote Work's Impact

Natalia Emanuel, a research economist at the New York Fed, estimates that remote work accounts for 64% of the recent uptick in unemployment among young college graduates. The timing of this increase indicates that remote work, rather than generative AI, is primarily responsible for the troubling trend in youth unemployment.

Companies seem increasingly hesitant to onboard fresh graduates into remote roles. The challenge lies in bridging the gap between academic knowledge and practical skills, a task complicated when training is conducted from afar. The question arises: Are we adequately preparing the younger workforce for a remote-first world, or are we setting them up for failure?

The Gen Z Career Crunch

This situation dovetails with what's been described as a 'Gen Z career squeeze'. With middle managers under pressure, the preference often leans towards experienced hires who require minimal training. This leaves new graduates struggling to secure roles and develop the necessary skills for career progression.

The rise in unemployment rates for young graduates in remotable occupations has been notable, with a near 1% increase from 2017-19 to 2022-24, the New York Fed notes. Conversely, older workers in these sectors have experienced a slight decline in unemployment, pointing to a generational divide in how remote work is impacting employment opportunities.

AI: A Misunderstood Element?

Despite the narrative that positions AI as a significant threat to entry-level jobs, the evidence suggests otherwise. Industry voices, like Torsten Sløk from Apollo Global Management, argue there's 'zero evidence' of AI-induced layoffs. In fact, AI might be aiding business formation in the US, potentially creating more jobs than it replaces.

Further research by Peter John Lambert from the London School of Economics and Yannick Schindler of the Ellison Institute indicates that work-from-home exposure is a stronger predictor of dwindling early-career hiring than AI. So, is it time to reconsider our assumptions about AI's role in the job market?

, while AI remains a hot topic, it's the structural shift towards remote work that's reshaping the employment landscape for Gen Z. The deeper question lies in how we adapt our education and training systems to prepare young workers for this evolving environment.