Laura Ullrich sympathizes with college students looking for work. The director of economic research for the workplace is certainly aware of the problem. His son, a data scientist, is getting his master’s degree this year. He says: “Because of the work I do, the parents of many of his friends and his friends ask me to help. “But it’s a cruel thing now.”
The labor market worsened for recent college graduates, ages 22 to 27, at the end of last year. The unemployment rate rose to about 5.7% in the fourth quarter of 2025, which is an increase from previous months and above the rates of 4.2% for all workers and 3.1% for college age groups of all ages, according to the New York Fed.
Students like Ullrich’s son, who are looking into the technology sector, face another problem: a phenomenon Ullrich calls “experience creep,” where employers demand higher levels of experience at the expense of opportunities for early career professionals. The share of ads opened to those with two to four years of experience has dropped from 46% in mid-2022 to 40% in mid-2025, while the share looking for at least five years of experience has gone from 37% to 42%, according to real data.
This trend is, in part, dependent on supply and demand. “The reality is that it’s an employer’s job market, so they have the freedom and ability to ask for years of experience,” Ullrich says.
The preference for more experienced candidates coincides with the rise of AI capable of performing low-level work—the kind of demanding work that would often be a door step for first-time workers. A November report from Stanford economists found “significant declines in employment for prime-time workers (ages 22-25) in occupations most exposed to AI, such as software developers and customer service representatives” while “overall employment continues to grow.” Collectively, the results support the idea “that emerging AI is already beginning to affect primary-level work.”
Ullrich is not entirely convinced that AI, as a tool, is directly to blame. There are still a few smoking guns leading to employers actually replacing human workers with AI agents. “What’s hard to know is whether this is really about AI technology disrupting the task against the AI investment disrupting work.” There is growing evidence that it is the latter, with companies prioritizing capital costs over the large, expensive work of building AI.
“[Companies] they may be spending less on labor because of that capital-labor trade-off, just as they would if, suddenly, they decided to buy a bunch of new equipment. That’s kind of what always happens when we go through times of technological disruption,” Ullrich says: “But this is different, because AI can do some work that people in school do, so it’s very difficult to separate the two.”
Professional experience is very strong in technology, which is the easiest part of hiring, which gives employers a solid power. US job openings in Indeed for software developers at all levels, for example, are currently down 29% from the pre-crisis benchmark. Data and analytics jobs fell by 38%.
In the short term, experience is good news for tech companies who can work with experienced workers for lower prices than high-level rookies. But it’s an approach that can attract employers in the long run. The growth in tech jobs is happening at higher-level, higher-paying positions, Ullrich says. “How do you get the number of seniors you need if you don’t train juniors?”
It’s a question all firms will face if AI does indeed eliminate many high-level jobs, as some executives like Anthropic’s Dario Amodei have predicted.
For now, Ullrich advises young graduates—including his son—to rely on AI and “prove to companies that you and AI are better than AI without you.”
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