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The impact of Artificial Intelligence (AI) on the job market is expected to fall on entry-level white-collar workers, says a report by Jefferies.
The report highlighted that the unemployment among recent college graduates in United States is now at 5.8 per cent, which is higher than the national average of 4 per cent and more than double the 2.7 per cent rate for all college graduates. Jefferies said, "We believe AI's most significant impact for investors will be through labour disruption, beginning with entry-level roles". This indicates that young people just entering the workforce are struggling more than others to find jobs. AI is seen as one of the key reasons behind this shift. The report mentioned that Dario Amodei, CEO of AI firm Anthropic, has predicted that AI could replace 50 per cent of entry-level white-collar jobs within the next 1 to 5 years. He also warned that unemployment could rise sharply, even reaching 10 per cent to 20 per cent if the trend continues. The report also pointed out that many of the affected jobs are in fields like sales, customer support, software development, and marketing, areas where junior employees make up a large part of the workforce. Even technical degrees are not a safe bet anymore. Recent graduates in Computer Engineering and Computer Science are among those facing higher-than-average unemployment rates, at 7.5 per cent and 6.1 per cent respectively. Interestingly, it's not just tech companies talking about AI anymore. Jefferies found that out of 419 U.S. companies discussing AI in their earnings calls since 2021, 40 per cent are from non-tech sectors like retail, finance, and healthcare. Despite job losses in some areas, the report also shared mixed views from business leaders. IBM CEO Arvind Krishna said AI has helped the company invest in new roles, and total employment has actually gone up. However, Klarna's CEO admitted that replacing staff with AI led to poorer customer service and may force them to rehire people. Overall, the Jefferies report paints a complex picture. While AI brings opportunities for businesses to grow and improve efficiency, it also creates risks for young workers trying to start their careers. The report suggested that companies, governments, and educators must act fast to help people gain new skills and adapt to this changing job market. (ANI)
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