AI's Impact on Knowledge Workers: Winners and Losers in the Job Market

The US job market is experiencing a bifurcated trend, with professional and business services wage growth accelerating over the past year, while young college graduates face soft conditions. Despite an overall unemployment rate of 4.2%, only 65.3% of 20- to 24-year-olds were employed last month, and the unemployment rate for 22- to 29-year-olds has increased from 2.8% in 2019 to 3.7% this year. The impact of AI on the job market is likely contributing to these trends, with companies such as Meta, Alphabet, and Microsoft investing heavily in AI and scaling back hiring.

The U.S. job market is currently experiencing a bifurcated trend, with professional and business services wage growth accelerating over the past year, while young college graduates face soft employment conditions. Despite an overall unemployment rate of 4.2%, only 65.3% of 20- to 24-year-olds were employed last month, and the unemployment rate for 22- to 29-year-olds has increased from 2.8% in 2019 to 3.7% this year [2]. The impact of artificial intelligence (AI) on the job market is likely contributing to these trends, with companies such as Meta, Alphabet, and Microsoft investing heavily in AI and scaling back hiring.

Google has announced a significant initiative to address the AI education and job training gap. The tech giant will provide $1 billion worth of AI education and job training tools to U.S. colleges and universities over the next three years. This commitment will also make the programs available to non-profits for free. Google has partnered with over 100 public universities, including Texas A&M and the University of North Carolina, and all accredited, non-profit colleges and universities in the U.S. are eligible for the partnership [1].

The push for AI education comes as the world's biggest tech companies are vying for dominance in the AI space. Google's CEO, Sundar Pichai, noted that knowing how to use AI technology will be crucial for future professionals to succeed. Through Google's "Career Certificates," the company will offer free AI training to all U.S. college students, providing them with tools such as Gemini 2.5 Pro, Deep Research, NotebookLM, and Veo 3 [1].

However, the AI boom is not without its challenges. While AI has the potential to create new opportunities, it also poses significant risks to the workforce. A report from outplacement firm Challenger, Gray & Christmas found that employers attributed at least 10,000 job cuts from the beginning of the year through July explicitly to AI, with another 20,000 positions cut for other reasons related to technological innovation [1]. These trends highlight the need for continuous education and adaptation in the job market.

In contrast, the professional and business services sector has seen wage growth accelerate over the past year, reaching levels solidly above pre-pandemic rates. This suggests that there are both winners and losers in the AI-driven job market. While some workers are gaining from the AI boom, others, particularly young workers, are facing challenges in finding employment. The bifurcated nature of the job market underscores the need for targeted policies and initiatives to support those most affected by AI-driven changes.

References:
[1] https://www.cbsnews.com/news/google-ai-education-college-job-training-1-billion/
[2] https://www.bloomberg.com/opinion/articles/2025-08-07/youth-is-losing-to-experience-in-white-collar-job-market