Generative Ai Hits Fresh Graduates Hardest As Entry Level Roles Disappear

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Letter to Editor
THE arrival of sophisticated generative artificial intelligence has opened a profound structural shift in the labour market, one that carries particular and disproportionate risks for the newest members of the workforce.
Analysis of recent employment trends suggests that the widely adopted use of these tools, particularly since late 2022, has begun to cleave the entry-level career path, creating a distinct divergence in hiring outcomes based on the nature of the work itself.
This is not merely a forecast of future disruption; the impact is already measurable in hard data, functioning as an early warning signal for the economic engine of human capital formation.
The most compelling evidence points to a substantial chilling effect on the employment prospects of young adults, specifically those aged 22 to 25, in jobs deemed highly susceptible to AI.
We have observed a meaningful drop in employment for this demographic within occupations like software development and customer service, even as the overall economy has generally demonstrated robust growth.
This pattern suggests that firms are not simply reducing overall hiring; they are specifically choosing to bypass the traditional entry-level route for roles where AI can now perform a significant portion of the rudimentary, codified tasks that previously served as a training ground for novices.
This phenomenon is fundamentally about the difference between automation and augmentation.
When companies deploy AI to automate tasks to completely replace or subsume the standardized, repetitive work they eliminate the need for the human entry-point that once handled those tasks.
This directly accounts for the global decline in hiring for young workers. Conversely, in jobs where AI is used for augmentation as a tool to enhance the capability of a human worker, particularly one with judgment and experience, employment remains stable or even increases.
The market is thus rewarding the latter model and punishing the former.
The surprising resilience of older, more experienced workers in these same AI-exposed fields highlights a critical lesson regarding human capital: tacit knowledge would be an invaluable defence.
Tacit knowledge, defined as the accumulated wisdom, contextual understanding, and intuition that can only be gained through years of practical experience and social interaction, is presently difficult, if not impossible, for AI to replicate.
Experienced professionals are retaining their roles because their value lies in nuanced decision-making, strategic oversight, and interpersonal skills.
This ability to synthesize, communicate, and exercise judgment is the ultimate complement to AI, not a substitute for it.
The implication for the future of work is clear. Educational institutions and young people themselves must recognize that the returns to acquiring purely codified knowledge (i.e. the kind of information easily catalogued, regurgitated, and now automated by an algorithm) are rapidly diminishing.
Success in the new labour market will not depend on avoiding AI, but on developing the distinctively human skills that can leverage it. 
The new value frontier lies in areas like complex problem-solving, emotional intelligence, effective communication, and ethical judgment – the very attributes that enable effective human-to-human interaction and strategic deployment of the new technology. 
Ultimately, the question is not whether the economy needs less labour, but whether it needs a different kind of labour, one that only sophisticated human agency can provide. 
Dr. Diana Abdul Wahab is a senior lecturer from the Department of Decision Science, Faculty of Business and Economics, Universiti Malaya.
The views expressed are solely of the author and do not necessarily reflect those of MMKtT.
-  Focus Malaysia

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