AI boom potentially diminishing entry-level opportunities for American graduates, causing them to struggle in job search
The United States is witnessing a significant transformation in the job market, with the rise of artificial intelligence (AI) and changes in immigration policies affecting Indian students studying in the country.
According to a Jefferies report, AI could potentially replace up to 50% of entry-level white-collar jobs within the next one to five years, threatening the traditional model of fresh talent accepting lower pay for on-the-job training and experience. This shift is particularly noticeable in sectors such as sales, customer support, software development, and marketing, which are predominantly driven by fresh graduates.
However, the demand for highly skilled workers, especially those with STEM and AI-related skills, is on the rise. India was the leading country of origin for international students in the US during the 2023-2024 academic year, with 331,602 students, marking a 23% increase from the previous year. The growth in Indian students was mainly driven by graduate programs and the Optional Practical Training (OPT) program.
Sectors like information technology, finance, insurance, and professional services continue to grow despite the slowdown in graduate hiring. The OPT program saw 97,556 participants in the US.
The shift towards AI is not only reducing the number of entry-level jobs but also creating new opportunities in AI-related fields. According to recent data, there is a rapid growth in AI jobs, with a 25.2% increase in AI jobs year-over-year in early 2025. AI engineers and data scientists command significantly higher salaries than many traditional entry-level roles, offering a 35% wage premium.
The evolution in the job market requires recent graduates to adapt quickly and develop sharper critical thinking abilities, skills that many of today's computer science graduates still lack. New graduates must learn to detect system vulnerabilities and critically evaluate the reliability of AI-generated outputs.
The unemployment rate for recent college graduates in the United States reached 6.6% over the 12 months ending in May. This figure is climbing faster than for those with only a high school diploma or an associate degree. The shift in hiring is not about the complete disappearance of entry-level jobs but a growing mismatch between what companies need and what recent graduates are prepared to offer.
CEOs like Rebecca Price, a partner at Primary Venture Partners, are encouraging companies to reconsider every new hire, especially whether the role could be automated. Business leaders are openly acknowledging AI's potential to significantly reduce headcounts with the use of tools like ChatGPT.
In conclusion, the rise of AI is reshaping entry-level employment by reducing demand for routine or easily automated tasks, increasing demand for advanced AI and STEM skills, leading to higher wages in growing AI fields, and flattening corporate structures. This shift requires adaptability from recent graduates entering the job market, focusing on developing the skills necessary to thrive in the AI-driven economy.
[1] Jefferies Report, 2025 [2] Burning Glass, 2025 [3] McKinsey & Company, 2025
- The shift towards AI and technology is set to increase volatility in the finance sector, as companies in the exchange industry adapt to new developments and changing market dynamics.
- In the field of personal-finance, understanding the implications of AI and automation becomes crucial for individuals seeking to make informed decisions about their investments and financial planning.
- The growing emphasis on AI and automation in business brings new opportunities for entrepreneurs and investors in the Defi (decentralized finance) market, where innovative solutions can cater to the evolving needs of the market.
- Given the rising demand for highly skilled AI professionals, education-and-self-development institutions are developing programs and courses in artificial intelligence, machine learning, and data science to empower students with the necessary skills for career-development.
- Against this backdrop of technological advancement, policy-and-legislation plays a vital role in ensuring fair labor practices, data privacy, and ethical AI development, with politics influencing these policies significantly.
- General-news outlets are increasingly covering the implications of AI and automation on various industries, societies, and economies, providing valuable insights for lifelong learning and remaining competent in the rapidly evolving job market.
- To flourish in the AI-driven economy, individuals should focus on developing critical thinking abilities, system analysis skills, and data literacy, which will not only make them more competitive in their respective fields but also enable them to partake in learning and skills-training opportunities.
- Businesses adopting AI and technology must remain mindful of the potential social costs of automation, such as unemployment and skill gaps, and prioritize employee training, upskilling, and reskilling initiatives to cushion the impact.
- It is essential for students to pursue formal education and gain foundational knowledge, but learning online resources and self-paced courses can also provide supplementary, targeted education on topics such as AI, AI-related fields, and the latest technology trends, thereby enhancing their chances in the competitive job market.
