A new study from the Federal Reserve Bank of New York challenges the popular narrative that artificial intelligence is putting young college graduates out of work. Instead, the research points to a different culprit: the rise of remote work since the pandemic.

The study, led by New York Fed research economist Natalia Emanuel, found that the unemployment rate among young college graduates in “remotable” occupations rose by about 1 percentage point from 2017-2019 to 2022-2024. Among older workers in the same fields, the jobless rate actually declined slightly. In non-remotable jobs — those that must be done in person — there was little gap between older and younger workers.

The Training Gap

The core finding: businesses are reluctant to hire new graduates into remote positions because it is harder to train and mentor them when they are not in the office. The authors calculate that remote work is responsible for nearly two-thirds of the rise in unemployment among young college graduates since the pandemic.

“Remote work has weakened incentives to hire young workers by impeding on-the-job training,” the study concluded. “Employers may not want to hire fresh graduates onto distributed teams because it is more difficult to teach them the requisite skills from afar.”

The New York Fed also examined detailed data from an unnamed Fortune 500 tech company and found the pattern held: when offices were closed, the firm hired fewer inexperienced workers and more experienced ones. Once offices reopened, hiring of younger workers resumed — but the company still favored more experienced workers for teams that included remote arrangements.

Implications for LA’s Workforce

For Los Angeles, the findings are particularly relevant. LA County’s economy is heavily weighted toward “remotable” industries — entertainment, tech, finance, professional services — and the region’s young workers have been among the hardest hit by the current job market slowdown. The unemployment rate for college grads aged 22 through 27 reached 5.8% last year, the highest outside the pandemic since 2012.

The study’s timing is notable. Concerns about AI displacing young workers have dominated headlines, and this spring’s college graduates have booed references to AI during commencement speeches. But the New York Fed data suggests the problem predates ChatGPT, and that the shift to distributed work is the more immediate threat to early-career hiring.

For LA employers and policymakers, the takeaway is that return-to-office mandates may serve a workforce development purpose that goes beyond productivity debates. If companies want a pipeline of young talent, the research suggests they need to be in the same room.

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