AI hype could sideline Gen Z workers (www.businessinsider.com)

Economist Marc Sumerlin — a possible contender to succeed Jerome Powell as Fed chair — warned that early AI gains may prompt firms to pause hiring recent graduates, worsening prospects for Gen Z. Speaking to ABC, Sumerlin said companies seeing “dramatically better results” from initial AI integrations could delay recruiting because new hires often take a year or two to generate net value. He pointed to rising unemployment among recent college grads (averaging 4.59% so far in 2025 versus 3.25% in 2019) and Goldman Sachs data showing tech-sector joblessness for 20–30‑year‑olds up nearly 3 percentage points since early 2024 as early signals that entry-level opportunities are shrinking. The warning matters to AI/ML practitioners and policymakers: it highlights a near-term labor‑market friction where automation substitutes for junior roles before new AI‑enabled jobs emerge, raising distributional and skills-policy questions. Sumerlin urged the Fed to cut rates to support hiring but said decision‑making is hampered by a government shutdown that’s left the central bank “driving in the fog.” Voices in tech are split — Reid Hoffman celebrates Gen Z’s AI fluency, while figures like Dario Amodei and Gary Shilling predict many entry-level roles may disappear — underscoring urgent needs for reskilling, targeted hiring incentives, and thoughtful macro policy to smooth the transition.