Unemployment among recent college graduates reached 9% in November, but this number could look like a small concern in the coming years if action isn’t taken now to address the risks posed by artificial intelligence (AI) to the job market. That’s the warning from Democratic Senator Mark Warner of Virginia, who recently expressed deep concern over the future of young workers as AI continues to reshape industries.
Speaking at the CNBC CFO Council Summit in Washington, D.C., Senator Warner painted a grim picture, suggesting that the unemployment rate for recent college grads could skyrocket to 25% in the next three to five years if AI-driven job displacement isn't proactively addressed. His warning underscores the urgency of the situation as technology advances at an unprecedented pace, leaving workers and policymakers struggling to keep up.
The Real Threat: Jobs That Won’t Be Created
Warner’s concern is not just about job losses from the recent wave of layoffs in big tech companies, but about the lack of new jobs being created altogether. As AI technologies automate tasks traditionally done by humans, companies are increasingly cutting back on entry-level positions, internships, and first-year hires. Many big banks have already shared plans to reduce these roles by half in the coming years, a trend that could exacerbate unemployment among young Americans just starting their careers.
In a candid interview, Warner explained, “What I am more worried about than the recent announcements, the 15,000 or 14,000 job losses at the big tech companies, is the job dislocation that takes place in terms of jobs not being created in the first place.” With fewer opportunities available for recent graduates, the gap between their skills and the labor market’s needs could widen dramatically.
The College Debt Dilemma
Warner’s concerns are compounded by the fact that many of these young people are already burdened by substantial student loan debt. Having invested hundreds of thousands of dollars in their education, they now face an uncertain job market where the opportunities they were promised may never materialize. This could lead to widespread frustration, not just among graduates, but also among their parents, who are equally invested in their children’s futures.
“We will have a lot of parents pissed off,” Warner said, acknowledging the growing unease surrounding the issue. “I don’t think we have our arms around this.”
A Plan for Action
To address this looming crisis, Warner is working with Republican Senator Josh Hawley of Missouri on legislation that would require data collection on AI-related job losses. Their goal is to measure the impact of AI on employment over the next five years and to develop proactive policies that can help ease the transition for workers displaced by automation.
Warner emphasized the need for a collaborative effort between government and industry, saying, “If we don’t get this right, we could end up with kind of an anti-innovation populism coming from both the left and right.” He stressed that while AI will undoubtedly create new jobs and boost productivity in the long run, there is a critical interim period that requires attention and planning.
“We will see a whole new raft of AI-centric jobs created,” he said, but warned that there will be a gap before these new roles fully materialize. It’s this period of transition that Warner is focused on, arguing that if not handled carefully, it could lead to long-term economic and social consequences.
The Problem with Previous Solutions
One of the most significant challenges, Warner noted, is that previous efforts to address the changing job landscape have largely missed the mark. For example, the push to make everyone a coder was not the right solution, he argued. “We were wrong,” he said, reflecting on past initiatives to retrain workers for tech-centric roles. As automation continues to advance, he believes that simply encouraging workers to adopt new skills won’t be enough to solve the problem.
He also pointed to another flawed solution often touted by corporate leaders: the idea that the job market will naturally shift toward growth in traditional skills, like trades. But when it comes to encouraging young people to pursue these fields, Warner noted, the reality is much different. “When we get to the point of asking how many of you are encouraging your daughter or son to be a carpenter, no one raises their hand,” he said.
Industry’s Role in the Solution
Warner’s preferred approach is to engage industry leaders in a collaborative effort to gather data on AI job losses and find solutions that work for both workers and companies. However, this process won’t be easy. With so many stakeholders involved—ranging from tech companies to financial institutions—Warner acknowledged that bringing everyone to the table will be a difficult task. But he remains hopeful that, with the right data and cooperation, it can be done.
He also expressed frustration with some in the tech sector who have suggested that the government should foot the bill for solutions like universal basic income (UBI) if half the population loses their jobs. For Warner, this is not the answer. He pointed to the failure of social media regulation in the past, noting that while many hearings were held to discuss potential guardrails, little was actually done to address the issues. He worries that without proper regulation, the disruption caused by AI could lead to even worse societal outcomes.
A Critical Time for Policymakers
Warner’s message is clear: The impact of AI on the job market is one of the most pressing policy issues of our time. He believes that if the right steps aren’t taken, we could be looking at widespread unemployment and social unrest in the years to come. But there’s hope. With thoughtful policy, industry collaboration, and proactive planning, it’s still possible to navigate this transition successfully.
“We’ve got to get the data set… which will be hard, but I think we can get there,” he said. As AI continues to transform the workforce, the next few years will be crucial in determining how society adapts to this seismic shift in the labor market.
For young Americans entering the workforce today, the stakes couldn’t be higher.