A Harvard working paper tracking 62 million workers across 285,000 U.S. firms found that companies adopting generative AI reduced junior employment by about 9% within six quarters.
This is based on the updated May 2026 version of the paper, while senior employment held steady. Seyed Mahdi Hosseini Maasoum and Guy Lichtinger, the paper’s authors, describe the pattern as “seniority-biased technological change.”
Morgan Housel, bestselling author of The Psychology of Money, raised this concern on The Tetr Podcast, telling host Pratham Mittal he would “move mountains” to send his children to a good college.
But Housel also flagged a problem that no tuition check can solve: AI is eliminating the junior positions where graduates have always learned how to work.
For parents investing in college savings plans, that gap between the diploma and the career it used to unlock is widening.
Housel still backs college but says the diploma alone is not enough
On the podcast, Housel told Mittal that almost everything taught at a university can now be learned through platforms like YouTube or ChatGPT.
“Even so, Housel told Mittal he would still ‘move mountains’ to send his children to a good college.”
He also pushed back on the entrepreneurship narrative, noting that starting a business often delivers less freedom than students expect.
Social media compounds the pressure, Housel observed, by turning the entire world into a comparison group and making it harder for young people to define success on their own terms.
Entry-level roles in debugging, testing, routine coding, data entry, and basic financial analysis have always been where graduates developed judgment, accountability, and an understanding of how decisions play out inside organizations.
Artificial Intelligence handles this work faster and cheaper, resulting in a freeze on junior hiring rather than mass layoffs of experienced workers.
AI keeps senior workers but freezes out junior hires globally
Entry-level hiring at the 15 largest tech companies dropped more than 50% from pre-pandemic levels through 2024, with fresh graduates going from about 15% of all new hires to roughly 7%, according to SignalFire’s 2025 State of Tech Talent Report.
SignalFire’s June 2026 update revised the decline to roughly 65% across 12 Tech Majors since 2019. Early-stage startups fared worse, with entry-level hiring falling around 75% over the same period.
Natasha Pillay-Bemath, IBM’s VP of Global Talent Acquisition and Executive Search, said junior positions now demand analytical and AI skills.
Entry-level roles are shifting from purely task-driven work to analysis, problem-solving and responsible AI use,
Indian IT services firms cut entry-level roles by 20% to 25% due to automation. Job platforms including LinkedIn, Indeed, and Eures tracked a 35% decline in junior tech positions across major EU countries during 2024, Rest of World noted.
At the 2026 World Economic Forum in Davos, IMF Managing Director Kristalina Georgieva said, “We expect over the next years, in advanced economies, 60% of jobs to be affected by AI, either enhanced or eliminated or transformed, 40% globally. This is like a tsunami hitting the labor market.”
She added that “tasks that are eliminated are usually what entry-level jobs present, so young people searching for jobs find it harder to get to a good placement.”
Organizations lose the training layer that built professional judgment
Forbes columnist Samantha Walravens reached a similar conclusion in a January 2026 piece: when companies eliminate junior roles, they save on payroll but lose the training layer that produces their next generation of leaders.
Jossie Haines, an executive coach and former engineering leader at Apple, told Forbes that AI cannot automate human judgment.
“AI could potentially figure out how to process copyright tickets,” Haines explained in the Forbes feature. “But it cannot figure out why the product team keeps building features that raise copyright concerns, or how to address that from a process perspective.”
That kind of systems-level thinking develops through proximity to real decisions, through catching errors before they spread and absorbing how accountability works inside an organization.
When companies cut the roles where this learning happened, they save on payroll but erode their own leadership pipeline.
Hiring spikes, but the bar for new graduates keeps rising
The National Association of Colleges and Employers initially projected only a 1.6% increase in hiring for the Class of 2026 in its November 2025 Job Outlook, Forbes reported.
NACE’s April 2026 Spring Update revised that figure upward to 5.6%, with more than a third of employers reporting plans to add hires. But more openings haven’t made landing the job easier.
“Employers are increasingly unwilling to gamble on unproven candidates. Instead, they favor applicants who can point to concrete work they’ve already done and explain how it translates to the role,” Bari Williams, a startup advisor and former senior legal counsel at Facebook, said.
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In her view, career services can no longer be a senior-year stop for resume polish.
Schools need to build durable pathways that give students real responsibility earlier, including client-based projects, embedded internships, and evaluation that rewards judgment rather than completion.
IBM is a counterexample: the company plans to triple its US entry-level hiring in 2026 and has “rewritten every job” to shift junior roles toward analysis, problem-solving, and AI oversight, Chief Human Resources Officer Nickle LaMoreaux told the Charter AI Summit, IBM Think reported.
Parents face a harder question about what comes after graduation
A degree still opens doors, but it no longer guarantees the on-the-job training that used to sit behind those doors.
The old career bargain, where college taught students how to think and entry-level jobs taught them how to work, assumed that junior roles would continue to exist at scale.
The families writing checks this fall face a harder question than the one their own parents answered. The old question was whether the school was worth the money. The new one is whether the program produces a graduate who can do something a company can’t already get, faster and cheaper, from a model.
Related: From Corporate Careers to Remote Freedom: Insights from Digital Nomads
