Jeffrey Sonnenfeld and co-authors argue in this Yale Insights analysis that AI’s labor market impact is showing up primarily through reduced entry-level hiring rather than mass layoffs. They cite recent college graduate unemployment climbing to nearly 6 percent, alongside the spread of agentic AI systems automating workflows in banking, telecommunications, manufacturing, and real estate. The authors contend that companies are holding overall headcount steady while declining to backfill departing roles, effectively narrowing the pathway into employment for new graduates.
