Fed: Remote work, not AI, is driving Gen Z unemployment

The New York Fed says remote work, rather than generative AI, helps explain much of the recent rise in youth unemployment. In a June 1 Liberty Street Economics post, research economist Natalia Emanuel wrote, 'We estimate that remote work can explain 64 percent of the recent increase in unemployment among young college graduates.' The timing of the surge, she added, points to remote work as the main driver.

Co-authors Emma Harrington and Amanda Pallais noted a four-fold rise in remote work since the pandemic and argued it has made hiring entry-level staff harder. Employers may be reluctant to bring fresh graduates onto distributed teams because it is more difficult to teach them the requisite skills from afar, which feeds into a growing 'Gen Z career squeeze.' The authors also said youth unemployment began rising before AI became widespread in workplaces.

United States, New York

remote work, generative ai, gen z, youth unemployment, fed, liberty street, college graduates, entry level, distributed teams, pandemic