AI fears and job crisis: How artificial intelligence is changing the job market for academics

Berlin. Young people in the US appear to be viewing AI with increasing fear and anger. This can be seen in video clips that have been going around the world for some time: graduates in the USA boo the speakers at their graduation ceremony as soon as they use the word AI.

In the United States, a university education costs tens to hundreds of thousands of dollars. There is great fear that this investment may no longer be worthwhile, as unemployment among young graduates is increasing. Many young people apparently attribute this to the changes that AI is causing in the world of work. But not all disciplines are affected equally.

Handelsblatt evaluated job market data from the USA and Germany. They show which subjects are particularly affected by the AI ​​disruption, which continue to be in particularly high demand and how young people choose the most promising subjects from more than 23,000 subjects in Germany.

To understand why the current job crisis is different from previous ones, it is worth first looking at the unemployment figures in the USA. Many experts see the USA as an indicator of the labor market effects of new technologies, which can also spill over into Germany.

The data shows a peculiarity of today's times: Even though unemployment among young academics there has increased with every economic crisis - for example during the financial crisis of 2008 - it has traditionally been below the rate for the entire population among young people.

This has changed since 2022 - since the year ChatGPT came onto the market. Unemployment among university graduates in the USA between the ages of 22 and 27 is now higher than the overall rate. This was the result of an evaluation by the Federal Reserve Bank of New York (Fed).

In Germany, too, the unemployment rate among university graduates between the ages of 25 and 29 is slightly higher than that of the general population - this is shown by data from the European statistics agency Eurostat. So is there a risk of an AI crisis for university graduates in this country too?

Enzo Weber analyzes how digitalization and AI affect the labor market at the Institute for Labor Market and Occupational Research (IAB). He says: "Enzo Weber: We have worsened conditions for career starters, especially among academics. That is obvious."

The main reason for this is that there is a lack of new positions. Many companies are currently not filling positions for cost reasons. “Enzo Weber: In a crisis in which there are few jobs, those who are looking for new jobs suffer,” says Weber. And these include all the career starters who are fresh out of training.

It's not just the AI's fault. “Enzo Weber: The economic policy uncertainty is immensely high,” says Weber. US tariff policy, competition from China and energy crises have led to poor economic conditions for new jobs. Weber speaks of a “renewal crisis”.

However, AI creates a special situation - especially for academics. According to Weber, previous crises, such as the Corona or the financial crisis, were “sustainable” shocks for people with university degrees. Because the business model of their companies remained essentially intact.

Control functions such as management were largely spared from job cuts. “Enzo Weber: Today we have another crisis in which it is clear: the business model will not hold up, it must be changed,” says Weber. This affects the core of companies.

The result: Academics of all age groups, who would otherwise be more likely to find work than the average for the general population, are currently more affected by unemployment than in previous crises.

Virginia Sondergeld is also observing the “renewal crisis” in job advertisements. Among other things, she analyzes how the number of job advertisements there is developing for the job platform Indeed. Compared to November 2022, shortly before the release of ChatGPT, the overall postings on the platform have decreased by 37 percent, according to her. “Virginia Sondergeld: This decline has affected the vast majority of professional groups,” says Sondergeld.

If you are faced with choosing a subject to study, you can also look at how the number of job advertisements in different professions is developing as a basis for making your decision. Although the number of advertisements is falling overall, in some professional groups this decline is slower than in others; for occupational therapists, physiotherapists and psychotherapists the number of advertisements is actually increasing.

“Virginia Sondergeld: We expect continued robust demand for workers in the medical and social sectors in the coming years due to demographic change,” says Sondergeld. This makes medical and social courses particularly attractive for young people who want to study.

The greatest decline in demand has been for so-called “white-collar” professions – i.e. classic office jobs – such as in software development, human resources or marketing. The number of job advertisements here has halved since 2022. This trend started before ChatGPT. “Virginia Sondergeld: Nevertheless, hopes for AI efficiency increases in companies are of course high,” says Sondergeld. This contributed to companies becoming more reluctant to hire.

The labor market development in the USA also shows which disciplines promise high salaries and low unemployment in the long term. The New York Fed examined how many young graduates of a major are unemployed. She merged these numbers with the median annual salaries of experienced professionals in the same disciplines.

The average gross salary across all disciplines was $82,000 per year. The subjects that promise a higher salary while maintaining a low unemployment rate are primarily engineering subjects.

There are also subjects that also promise an above-average salary - but have higher unemployment rates. According to Fed data, these are primarily science courses and computer science.

However, this image is only a snapshot. AI and other technologies can change the job market at any time. "Enzo Weber: AI started with digital desk jobs. When it is combined with robotics, we are playing a completely different game again," says Enzo Weber from IAB.

The criterion by which young people choose their course of study should not only be its supposed AI resistance. “Enzo Weber: We shouldn’t just look at what AI leaves for us in the job market,” says Weber. “Enzo Weber: And we should ask ourselves: Do we really want to work in a job where the tasks always remain the same and there are guaranteed to be no innovations?”

Adaptability has become the new key skill. According to an evaluation by the European Center for the Promotion of Vocational Training (Cedefop), self-organization and willingness to learn are currently among the most sought-after skills on the German job market.

For this reason alone, studying is valuable in itself, regardless of the subject, says Weber. “Enzo Weber: An academic education teaches you the ability to abstract.” The course also improves young people's ability to learn and self-organize. They need both in order to continually face new challenges presented by new technologies.