Why Entry-Level Jobs Are Vanishing for Young Workers: AI, Economy, and the Broken Career Ladder

The Disappearing Entry-Level Job Crisis

When Federal Reserve Chair Jerome Powell explained the central bank’s first rate cut of 2025, he highlighted a critical issue: young people. "Kids coming out of college and younger people ... are having a harder time finding jobs," he said, pointing to a slowing labor market that has left many new graduates struggling to land their first positions. He acknowledged that the job-finding rate is very, very low, making this a stark admission from a top economic leader.

This challenge is backed by fresh research. Revelio Labs recently found that entry-level job listings are down 35% since 2023. Similarly, the Cengage Group’s 2025 Employability Report reveals that only 30% of this year’s graduating class have secured full-time jobs related to their degree, with nearly half feeling unprepared to even apply for entry-level roles.

Employers Are Raising the Bar

Employers are scaling back on hiring new talent, with 75% reporting they will fill the same number or fewer entry-level roles compared to last year. At the same time, they are demanding more credentials: 71% of employers now require a two- or four-year degree for entry-level work, up from 55% just last year. Ironically, fewer than 50% view a degree as a strong indicator of job readiness.

Michael Hansen, CEO of Cengage Group, emphasized the disconnect. "The challenge isn’t just fewer jobs — it’s an education and employment disconnect," he said. "Employers need technical and digital skills, but colleges often emphasize only soft skills. Career readiness can’t be optional — it must be a shared responsibility."

A Broader Economic Warning

Gregory J. Morris, CEO of the New York City Employment and Training Coalition, argues that this issue extends beyond Gen Z. "Calling this pattern 'hustle culture' makes it sound like a trend. In reality, today’s labor market no longer offers the launchpad it once did." Young workers are often forced into part-time or gig economy jobs, missing out on career growth, retirement savings, and professional development. This churn depresses spending power and threatens future skilled talent needs, making it a warning sign for the overall economy.

The Impact of AI on Entry-Level Roles

Artificial intelligence is exacerbating the problem. At an event hosted by the College Guidance Network, Harvard Business School professor Joe Fuller noted that AI is cutting into routine, rules-based entry jobs like paralegal work or tax preparation. LinkedIn’s Aneesh Raman warned that "entry-level" now means starting in the lobby, not the basement, with candidates expected to have AI fluency and tangible work experience from day one.

Real-Life Struggles and Parental Concerns

Jen O., a 28-year-old from Surrey, British Columbia, works 40 hours a week in HR and administration, plus another 25 hours in a second job to make ends meet. She says, "It doesn’t exist anymore," referring to true entry-level roles that offer training. Employers rarely invest in development, often requiring two to three years of experience for junior positions.

Parents are also worried. A survey found that 53% fear AI will erase entry-level jobs before their children graduate, and over 60% are reevaluating the value of a college degree. On Reddit’s Gen Z forum, users share stories of applying to numerous jobs with no responses, even for roles like cashier that demand prior experience.

The Need for Systemic Change

Gregory J. Morris sums it up: "The solution isn’t to tell young people to work harder. They already are. The solution is to create a system that works as hard for them as they are working for us." While monetary policies like rate cuts may help, they alone cannot fix the broken on-ramps to the workforce.