AI is getting too much of the blame for graduate hiring prospects, and there could be a job perk that is actually behind it all

• Remote work could account for around two-thirds of the increase in unemployment
• Young graduates need more in-person time to learn and pick up vital skills
• AI's impacts might continue to be felt as entry-level roles disappear

New data has revealed that artificial intelligence alone might not be responsible for a rise in youth unemployment. While it may account for some job losses, the Federal Reserve Bank of New York said that hybrid working could also be to blame.

According to the data, remote work could explain around two-thirds (64%) of the increase in unemployment among college graduates.

It seems that unemployment actually started rising post-pandemic, preceding the AI boom.

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Is remote work to blame for rising unemployment?

Between 2017 and 2022, the data shows that college graduate unemployment for those aged under 29 rose from 3.1% to 3.7% – a 20% increase. While older workers haven't quite seen the same trend, younger workers have been more susceptible, with New York Fed data revealing that 22-27-year-old graduates have seen unemployment rates rise from 3.6% in 2019 to 5.6% in 2026.

And it could all be to do with the need for in-person working – entry-level workers typically require frequent feedback, on-the-job coaching and mentorship opportunities, which are generally stronger in office environments.

As a result, employers could be more likely to employ already-experienced workers, instead of having to balance training new graduates across hybrid workplace environments.

The findings suggest that return-to-office mandates could actually be driven by a new for in-person graduate experiences, rather than the usual productivity benefits that execs like to cite.

That said, AI isn't totally off the hook, with experts also warning that automating entry-level roles and administrative tasks could ultimately lead to a lack of skilled workers in the future. Furthermore, AI having a greater impact in the years to come has not been ruled out.

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