While recent university graduates have faced one of the most difficult labor markets for years, the economist of Berkeley and Voluble Bradacker Brad Delong has a message for those who fight to win their first full -time concert: artificial intelligence (IA) and automation are not to be blamed. Larger forces are at work.
Delong, professor at UC Berkeley and former assistant assistant secretary of the Treasury, argued in a recent test The fact that the challenges faced by young job seekers today are mainly motivated by a generalized political uncertainty and a slow economy – not by the rapid rise of AI tools like Chatgpt or data creation robots. Delong offered his analysis on July 23, around 10 days before the report on July jobs, the markets revealed that the economy was much lower than what thought before for several months.
Eminent business leaders also reported disturbing signs in the economy before the report on July jobs. IBM vice-president and former Trump advisor Gary Cohn went to CNBC one day before job data, noting “warning signs under the surface”. Cohn said he pays special attention to the rate of leaving in the monthly data of Jolts, arguing that 150,000 less judgments were a disturbing sign of poor economic health.
Delong sounded a prophetic note, writing that “political uncertainty” on trade, immigration, inflation and technology “paralyzed corporate planning”, leading to a cycle of hiring self-reinforcement. The new entrants on the job market bring the weight of retirement to risk aversion. In other words, the upper class of the 2025 college is really unlucky.
The economist argued that uncertainty leads companies to delay major decisions – including hiring – faced with an unpredictable political environment.
“This risk aversion is particularly damaging for those who at the start of their career, who count on a constant flow of entry-level openings to get a foot in the door,” he wrote.
Delong has ranged similar warnings from a slowdown for years. He spoke to Fortune In 2022 on his theory of economy which begins to spit from his book Souchard to utopia. In 2025, he wrote, the great history of the job market is not really AI, but something different.
Political paralysis
So, what really prevents graduates freshly struck from winning this very important first job? Delong Cité Amanda Mull of Bloomberg Businessweek And his theory on “stochastic uncertainty” – a cocktail of unpredictability around government policies, trade, immigration and inflation. Companies do not shoot; Instead, they only wait. And many delay the new hires in anticipation of possible sudden changes in prices, inflation rates and regulatory environments. The result is an expected climate where employers, concerned about future economic shocks, have chosen prudence on expansion. The maintenance model strikes new entrants on particularly hard work.
While global unemployment in the United States remains low, the situation is particularly difficult for new graduates compared to the rest of the workforce. Citing economists, including Paul Krugman, Delong noted that if the absolute unemployment rate for college graduates is not alarming, the gap Between the unemployment of graduates and general unemployment rates, there are record levels. In the past, higher education has reliably led to reducing unemployment, but now recent graduates have difficulties “by a great margin” compared to previous generations.
He also noted that since 1997, young workers without university degree have become much less likely to seek work, their participation rate falling from seven percentage points.
Goldman Sachs
Mull has cited an analysis of the New York Federal Reserve Bank which found that technological and design fields, including IT, IT engineering and graphic design, see unemployment rates greater than 7% for new graduates.
Why the media threshing of AI is lacking the brand
Although the technological sector buzzes on the potential of the AI to replace junior analysts or automate entry -level tasks, Delong urged caution by attributing the reputation. In his typical style, he noted: “There is still [no] Hard and not even a mild semi-convincing story that “AI is to blame” for the scarcity of entry-level work. The slowdowns of hiring, he said, are motivated by broader economic forces: uncertainty, risk aversion and changes in the way companies invest.
Again, Delong’s analysis rhymes and aligns with recent research by Goldman’s Hatzius. The quarterly “adoption tracker” of the bank, issued in July, revealed that the unemployment rate of the professions exposed to AI had reconciled with the wider economy, which contradicts fears of mass movement. They also noted that there had been no recent dismissal announcements explicitly invoking AI as a cause, stressing that it is contained to disrupt specific functions, not entire industries.
Goldman Sachs
Above all, he argued, rather than hiring people, companies in the technological sector make follies on “the equipment that feeds artificial intelligence” – in particular the high performance chips of Nvidia – fueling a boom in capital investment while putting the touch of junior hiring.
“For companies, the calculation is simple: investing in IA infrastructure is considered a ticket for future competitiveness, while hiring junior personnel is a cost that can be postponed.”
Subtendance to these trends is a distance from all risks. Employers prefer to hire for specific short -term needs and are less ready to invest in the development of new talents – leave the young candidates taken in a cycle where “the simple fact of putting your foot in the door” is more difficult than ever. Outgoing workers, worried about the uncertainty of the labor market, are less likely to change jobs, which leads to less opening and greater stagnation.
Delong’s analysis was harmonized with the results of Goldman Sachs on the drop in the premium attached to a university degree:
“For the longer run, the increase in the college’s salary premium is over, and a drop has (probably) started.”
For decades, he continued, a university degree was a post for higher income, and the labor market rewarded people with advanced skills and references. In recent years, however, “it has reached a tray and can even fall”. The causes are complex, he added, but the dishes to remember: although the diplomas remain precious, they are no longer the ticket still in the process of prosperity.
These comments confirm the dark remarks of Professor emeritus of the University of Connecticut Peter Turchin, who recently spoke with Fortune On the drop in the status of the upper middle class in 21st century America. When he was asked where he sees it manifesting himself in modern life, Turchin said: “It is actually wherever you look.
“Look at the overproduction of university degrees,” he said, arguing that the decreasing bonus that Goldman and Delong write on unemployment in decline in college registration rates and high recent unemployment rates. “There is an overproduction of university degrees and the value of a university diploma really decreases.”
Line Dong for recent graduates: blaming a commercial climate opposed to risk, not technology, for today’s job problems. And now that we know that the economy may have been much more opposed to risks in 2025 than before, Delong’s warnings deserve to be revisited.
Delong did not respond to a request for comments.
For this story, Fortune Used a generative AI to help an initial project. An editor checked the accuracy of the information before the publication.
