Studies link AI to slower entry-level pay and hiring in some jobs

In short: Recent studies suggest AI is linked to slower wage growth and weaker hiring in some AI-exposed jobs, especially for younger and entry-level workers.

What's going on

Several recent papers and reports point to a similar pattern. Jobs that use AI heavily are not seeing a universal pay drop for everyone. Instead, the pressure shows up most in roles where AI can do some starter tasks that used to be done by junior staff.

One study from the Dallas Federal Reserve found that wage growth in AI-exposed occupations fell more in roles where experience does not pay much extra. In those jobs, higher AI exposure was linked to a 0.28 percentage point reduction in wage growth. In jobs with a more typical experience payoff, the reduction was much smaller, around 0.05 percentage points.

A 2026 working paper summarized by IESE reported that starting wages in AI-exposed US firms fell 4.5% after ChatGPT launched. For junior positions, the drop was larger at 6.3%. Separately, Stanford’s Digital Economy Lab found that employment for workers ages 22 to 25 in highly AI-exposed occupations is about 19% below where it would have been, and it seems to be happening mainly through reduced hiring, not more people getting laid off.

What to watch

Researchers also stress the effects vary by sector. Some AI-exposed areas, like computer systems design, still show wage growth above the national average in Dallas Fed data. The big question now is whether companies will keep using AI mostly to reduce entry-level work (like giving every team an extra fast assistant), or whether new tasks and new roles will expand hiring again over time.

Source: NYTimes