Federal Reserve Chair Jerome Powell put it bluntly after the Fed’s rate cut on Wednesday: recent graduates are feeling the squeeze. At his press conference, he said, “You are seeing some effects from AI, but it is not the main thing driving it.” Despite a recent Stanford analysis that finds since late 2022, early-career workers have seen a 16% relative decline in employment, a quieter force may be even more damaging. Youngism, the set of stereotypes and practices that discount younger workers as unreliable, lazy and disloyal, has outpaced any other type of ageism — and the economic impacts are startling.
Here is the bigger picture. Early-career workers have lost ground relative to older cohorts since 2022 and roughly half of employers tell researchers that young applicants are “not job-ready.” In one report, 93% of young people said they have faced negative age-based treatment at work, and more than one in four say it made them question working at all. In the United States, federal age-bias protections under the Age Discrimination in Employment Act begin at 40, which leaves Gen Z in a legal blind spot.
The result is a quieter structural change inside companies. Entry roles are thinning as job postings creep up to require three to five years of experience, and the first rung, which once trained beginners, is disappearing.
The risk is notable. Consider that in three to five years, the internal pipeline tightens and we’ll be right back to 2022, where employee mobility surges. Now firms will pay more to attract new talent, with longer time-to-fill and steeper premium pay to retain internal teams. The Society for Human Resource Management pegs average cost per hire near $4,700, and far higher for hard-to-fill specialists.
Outside AI-centered sectors, white-collar arenas are tightening the entry ramp, too. In finance, insurance, and professional and business services, employers are tilting toward experienced hires and a falling share of postings requiring less than three years’ experience. The same analysis shows junior “stepping-stone” work eroding in marketing, business operations, and customer service. In short, the shift is a broad white-collar phenomenon, not just tech.
Joint research by NYU Stern School of Business and The Wharton School at Penn documents the significant rise in “youngism” — with less favorable explicit sentiments toward young adults translating into workplace bias. In a conversation with lead researcher, Stéphane P. Francioli, he shared that in a striking shift, data showed ageism was noticeably higher among young adults in their 20s than older cohorts.
“Younger adults are experiencing higher debt, insecure employment, and reduced access to housing, and AI may further exacerbate young workers’ precarity,” says Francioli.
The Laziness Myth
The caricature of Gen Z as lazy and entitled is both timeless and new. Adults have long believed “kids these days” are worse than other generations. Every generation is expected to push back on the status quo, but no one really likes it when they do.
Today, the data suggests it really is tougher for younger generations.
Bias is now amplified by always-on platforms that reward negative content and make outrage look ubiquitous. Today’s early adulthood is tougher to navigate, with higher costs, unstable entry roles, and later milestones, so Gen Z pushes for stability, mental health, and flexibility.
Older coworkers often misread those priorities as lower effort. In reality, the opposite is true. Large-scale surveys show ambition expressed through multiple income streams and a focus on skills growth. Transamerica reports that 59% of Gen Z have a side hustle.
Inside the workplace, managers often justify the shift with the AI story. Tools can now absorb some basic tasks, so the first rung feels less necessary. Yet the best evidence so far points to task reallocation more than a jobs wipeout, which raises the premium on supervision, feedback, and real training. If senior staff offload routine work to software, someone still needs to learn how the system fits together, why exceptions happen, and which judgments preserve customer trust. That learning only happens if beginners are in the room. The Burning Glass analysis describes AI as an accelerant layered on top of lean staffing and risk-averse hiring, not a solitary cause.
The squeeze spills beyond work. In an interview for Why Are We Here? Creating a Work Culture Everyone Wants, a first-year teacher named Anna, carrying student debt and working a second job, puts it plainly to me: “What is the point, though? I will be 40 before I can afford a house, maybe not even then.”
Young adults are postponing big life decisions like buying a house or starting a family because of financial strain due to student debt and less entry level opportunities. This correlates to declining fertility rates which have fallen precipitously in recent years — the UK just reported its lowest on record.
Internships, a key on-ramp, are less reliable too. Employers extended fewer full-time offers to their 2023–24 interns than in prior years. The average offer rate fell to62 percent, the lowest in more than five years, which pushed the overall conversion rate below 51 percent, according to NACE’s 2025 Internship and Co-op Executive Summary.
None of this means AI is irrelevant. Powell was clear that it is “not the main thing driving it,” which is an important distinction, not a denial. The better interpretation is that AI sits alongside staffing choices and hiring norms that undervalue early-career talent. When companies shrink entry roles and raise experience requirements, they trade short-term convenience for long-term economic vulnerability. In time, turnover rises, time-to-fill stretches, and institutional knowledge leaks as veterans move on.
There are fixes that do not require new laws or billion-dollar budgets:
- Post true entry-level jobs with realistic requirements. Use skills-based criteria instead of inflated experience minimums.
- Rebuild the bridge from internship to employment and be transparent about conversion targets.
- Create apprenticeships beyond the trades, in customer success, data operations, and revenue operations, with real supervision and a clear curriculum.
- Provide wraparound supports that help first-job entrants persist through the hardest months, including transport stipends, structured mentoring, and mental-health resources.
Culture is the multiplier. Openness, the discipline that treats younger cohorts as contributors rather than risks, correlates with faster tool adoption, clearer feedback, and lower turnover. It also counters the corrosive message that young people are a liability.
Inevitably, openness to younger cohorts isn’t benevolence, it’s a business strategy. Firms that adopt and support young talent experience lower churn, faster adoption of new tools, and a deeper bench for roles that AI can’t always solve.
AI is here to stay; whether it shrinks headcount or simply becomes another tool – like email or team chat – remains to be seen. But blaming AI entirely for vanishing entry-level jobs ignores a costlier truth. When young workers are screened out by ageist assumptions, firms buy more labor on the open market at premium prices, turnover rises, tacit knowledge leaks, and innovation slows.
Gen Z is set to make up about a third of the global labor force by 2030. Marginalizing a generation is costly, even more so when bias is the cause.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
