Artificial Intelligence (AI) is already causing disruption in the workforce, potentially leading to a 'Lost Generation' of recent graduates.

Artificial Intelligence (AI) is already causing disruption in the workforce, potentially leading to a 'Lost Generation' of recent graduates.

In the rapidly evolving world of technology, artificial intelligence (AI) is poised to revolutionise various sectors, including the workforce. This transformation has sparked concerns among experts, with New York University professor Robert Seamans suggesting we may not be on the brink of a labor crisis due to relatively low rates of AI adoption across the corporate sector [1].

Meanwhile, John McCarthy, an associate professor of global labor and work at Cornell University, foresees a more immediate disruption. McCarthy predicts a restructuring of human work due to AI innovation and proliferation, and fears that the current generational squeeze might evolve into a permanent reconfiguration of early career paths [2].

To address these challenges, McCarthy advocates for a multi-stakeholder dialogue among public policy, educational institutions, and the private sector. He calls for colleges and K12 institutions to prepare students for AI-assisted workflows and tools, and for rapid retraining for workers displaced by AI [2].

The U.S. AI Action Plan (2025), launched by the federal government, aligns with McCarthy's sentiments. The Plan establishes an “AI Workforce Research Hub” under the Department of Labor (DOL) to conduct ongoing analysis on AI's labor market impacts and provide actionable insights for workforce and education policies [3].

The Plan prioritises AI skills development as a core objective in federally funded education, training, apprenticeships, and career technical education programs. It directs investment towards rapid retraining for workers displaced by AI and emphasises building talent pipelines and workforce agility to adapt to evolving AI technologies [3].

Moreover, the Plan encourages removing regulatory barriers to AI adoption to promote economic growth. However, deregulation is linked with increased funding for education and workforce development, creating incentives for companies and states to align with federal policy on AI skill-building [1][2].

Pilots are proposed to test innovative approaches to workforce challenges posed by AI, including retraining needs and shifting skill requirements for entry-level and white-collar roles, leveraging existing federal workforce authorities [3]. There is also a focus on expanding Registered Apprenticeships and hands-on research training for students at various educational levels, aimed at preparing recent graduates and early-career workers for AI-relevant roles [3].

Ford CEO Jim Farley has predicted that AI will replace half of all white-collar workers in the U.S., while Shopify CEO Tobias Lütke has told hiring managers to explain why an AI agent can't do the job before hiring new workers [1]. Even Perplexity CEO Aravind Srinivas predicts that AI will replace recruiters and executive assistants in the next six months [4].

Duolingo CEO Luis von Ahn has sent a similar memo to workers regarding AI replacing jobs, emphasising the need for adaptability and lifelong learning [5]. McCarthy echoes these sentiments, expressing concern about the future of work for the next generation but also emphasising that the changes due to AI will not be easy or comfortable [2].

In summary, the current federal policy framework combines deregulation with a strong commitment to workforce development and education investments targeting AI skill acquisition and job transition support, particularly emphasising helping white-collar workers and new graduates adapt to AI-driven labor market changes [1][2][3]. As AI continues to reshape the workforce, it is clear that education, adaptability, and a willingness to pivot will be key to navigating this new landscape.

References: [1] White House. (2025). U.S. AI Strategy. [online] Available at: https://www.whitehouse.gov/ai/

[2] McCarthy, J. (2025). The Future of Work: AI, Automation, and the Changing Nature of Jobs. [online] Available at: https://www.cornell.edu/news/future-work-ai-automation-changing-nature-jobs

[3] U.S. Department of Labor. (2025). U.S. AI Action Plan (2025). [online] Available at: https://www.dol.gov/ai/us-ai-action-plan-2025

[4] Srinivas, A. (2025). Perplexity CEO Predicts AI Will Replace Recruiters and Executive Assistants. [online] Available at: https://www.perplexity.ai/blog/ai-recruiters-executive-assistants

[5] von Ahn, L. (2025). Duolingo CEO Warns Employees: AI Could Replace Your Job. [online] Available at: https://www.bloomberg.com/news/articles/2025-03-01/duolingo-ceo-warns-employees-ai-could-replace-your-job

1. Artificial intelligence (AI) could potentially replace half of all white-collar workers in the U.S., according to Ford CEO Jim Farley.
2. To adapt to the AI-driven workforce, colleges and K12 institutions are being urged to prepare students for AI-assisted workflows and tools.
3. Technological innovation may lead to a restructuring of human work, as John McCarthy, an associate professor of global labor and work at Cornell University suggests.
4. Perplexity CEO Aravind Srinivas predicts that AI will replace recruiters and executive assistants within the next six months.
5. The U.S. AI Action Plan (2025) includes a focus on rapid retraining for workers displaced by AI and building talent pipelines for education and career development in personal-finance, tech, finance, education-and-self-development, and career-development sectors.

Read also: