The kids are alright?

Weekly Updates

The unemployment rate of US citizens younger than 25 shot up this year. Moreover, the increase has been mainly amongst people with some education. Those who failed to complete high school have not experienced rising unemployment.
With the frenzy of excitement around artificial intelligence, it might be tempting to blame technology. Machines, robots, or computers replacing humans is an ever-popular dystopian scenario. However, while it is often true that many of a graduate trainee’s tasks could be automated away, younger workers tend to be hired for their potential. AI does not change that.
Moreover, the US labor market experience is peculiar. Young Euro area workers have a record low unemployment rate. In the UK, the young persons’ unemployment rate has fallen steadily. Employment participation by young Japanese workers is near all-time highs. It seems highly implausible that AI uniquely hurts the employment prospects of younger US workers.
The US employment pattern more convincingly fits a broader hiring freeze narrative, affecting new entrants to the workforce. It also explains why less educated workers are not so badly affected—high school dropouts can take full-time employment at a younger age than college graduates, and so are more likely to have found work before this year’s hiring freeze began.