The nation’s largest employers are doing a lot less employing lately. In recent weeks, Amazon announced it would cut 14,000 jobs, Paramount axed 1,000 people, Target let go of 1,800 employees, UPS said it will start a purge of 14,000 people with the aim of getting rid of 48,000 workers in total, and Meta laid off around 600 people from its AI lab. All that is happening as we enter the “jobless growth” economy, a world where no one is hiring but their profits keep climbing.
As the Wall Street Journal points out, many of the jobs getting hit at the moment are white collar work: office jobs that offer a relatively comfortable lifestyle and, typically, room for growth. But at the moment, the job market is stuck in “no hire, no fire” mode, meaning no one is coming in, no one is moving up, and no one is looking for other opportunities. Instead, the whole world is stagnant—except those getting caught under the corporate axe as they try to boost their bottom line for the fourth quarter earnings report.
As these jobs go away, the path into the world of work that once represented at least one route to the American Dream suddenly has no entry point and a much lower ceiling than it used to. Job postings for entry-level and early career roles are way down year over year. The market has pulled up the ladder for people trying to get in on the lower rungs, and the prospect of climbing it is getting harrowing, too. A recent report from the Federal Reserve Bank of Philadelphia found that AI exposure is over three times higher for occupations that require a bachelor’s degree compared with those that don’t.
The idea up in the C-suite is almost certainly that automation will be able to fill in those gaps, even though there’s little to suggest that it will actually play out that way. According to a study done by the Center for AI Safety, AI agents were only able to complete about 3% of the work assigned to them that humans can do reliably. Given that, it’s little surprise that a recent report published by research and advisory firm Forrester found that more than half of all employers who cut workers and tried to replace them with AI regret the decision.
But don’t worry, they’ll still come out ahead. The same report predicted that those companies would bring back human labor, just at lower wages and potentially by farming out roles to overseas workers.