Paul Cantrell
Krugman:
❝What we’re looking at now isn’t the worst job market college graduates have ever seen. It is, however, the worst such market compared with workers in general that we’ve ever seen, by a large margin.
…
We have low overall unemployment, only slightly above historic lows, but unemployment among college graduates between 22 and 27 at recession-like levels.
This has never happened before.❞
https://paulkrugman.substack.com/p/bad-times-for-college-graduates
Paul Cantrell
❝I’d mostly discount the idea that this is largely about AI displacing educated workers.❞
YES. THANK YOU.
“AI is here doooom!! doooom!!” is such a common knee-jerk excuse for the miserable college grad job market right now, and…I don’t see it. In terms of real, actual, yes-it-worked, yes-you-can-clearly-replace-whole-highly-skilled-jobs successes inside of real actual businesses…I just don’t see it.
Whatever’s going on, the AIpocalypse is an •excuse•, not a •cause• here.
Paul Cantrell
Krugman outlines a constellation of possible causes around a core theme: extreme uncertainty.
“What does a business do in the face of this kind of uncertainty? It tries to avoid making commitments that it may soon regret.”
Krugman tries to tie it all to Trump’s recent actions, which is dubious: the post-college job market has been crap since 2022 or 2023; Krugman’s own graph suggests it started worsening circa 2018. The larger theme of uncertainty, however, fits that timeframe.
Paul Cantrell
It all fits. Suppose you’re corporate leadership. You’re laying people off / refusing to hire because you have no clue what things will look like even 1 or 2 years in the future, and you are •terrified•.
Meanwhile, your investors, your gullible trend-chasing investors, are already mentally dividing companies into “pre-AI” and “post-AI.” And not only do you have no idea how to be “post-AI,” but you have no idea whether you’ll be solvent next year. What do you tell them?!??
Obviously you tell them you’re not hiring because you’re having such incredible success with AI! Maybe even you’re going to lay off all the senior people! They’ll love that!
Now you’re not failing and flailing — you’re leading the march into the future! Yay!
Paul Cantrell
To be clear, this is all just squinting, not established fact. It’s just squinting that seems to me to fit.
Paul Cantrell
There’s a second theory, not mutually exclusive, about the frozen job market having to do with resentment from corporate leadership about the sudden surge in labor power in 2020. Someone (maybe @jenniferplusplus?) referred to this as a “captial strike.”
I’m not sure how much economic sense that theory makes — but I am sure that corporate leadership is impulsive, petty, and irrational, and frequently does things that make no economic sense. I can’t elucidate the theory well, but it’s thing I’m keeping my eye on.
Paul Cantrell
@leon_p_smith That may be true in some ways, but the graph in the Krugman article suggests this is a “since 2018-2020ish” thing and not a “last 25-30 years” thing:
Leon P Smith
@inthehands I mean, getting a college degree has been steadily becoming a lot more precarious over the last 25-30 years.
But I think there's a large segment of the business community, and almost the entire Republican party, that seem to have it out for anybody who has worked in a knowledge-based profession.
Carsten Franke
@inthehands based on my years in the corporate world I would agree with your analysis.
Paul Cantrell
@carstenfranke
I mean, I can’t say that this •is• what’s happening — but I’ve been around business enough to say it sure as heck •could• be.
Paul Cantrell
Whatever’s going on in the employment market, it feels like there’s some kind of fever that needs to break — as bubbles bursting, as a recession, •something• — and it’s only after it does that in hindsight we’ll have some measure of clarity.
Paul Cantrell
@ramsey Yes, it think that’s roughly of a piece with the “capital strike” theory.
If so, either (1) those jobs were never providing any actual value to businesses in the first place, or (2) it’s an unsustainable gambit on employers’ part. But I do agree there seems to be an appetite for that, for believing that •somehow• they can shrink the job pool and cut their salary costs, and the belief that they can almost seems to preceded the “how.”
Ben Ramsey
@inthehands @jenniferplusplus By artificially decreasing the job supply, companies have driven down salaries, and software engineers can’t just quit and go elsewhere, since it’s extremely difficult to find any jobs in the salary ranges previously enjoyed.
Ben Ramsey
@inthehands @jenniferplusplus I’m by no means an expert on anything remotely related to economics, but in my industry (software / web development), I think a lot of it has to do with resetting salaries and shifting power back to the employers.
Even well before 2020 (throughout the 2010s) software engineers enjoyed tremendous power in the job market and the ability to draw salaries traditionally reserved for upper management and VPs.
Carsten Franke
@inthehands yes, it is for a bunch of managers. I have been in meetings where these decisions were made. Most managers have no idea where the business is going and what investments are needed. So inaction cloaked in the latest buzzwords is the safest path for them. A few years ago it all was virtual reality and the metaverse, now it is AI...
Paul Cantrell
@carstenfranke
“inaction cloaked in buzzwords” sure rings a bell
Paul Cantrell
@carstenfranke
The same basic dynamic as a bunch of 15-year-old boys all trying to convince the others they’re having sex and all thinking they’re the only one who isn’t.
Paul Cantrell
More on this topic, via @drahardja:
https://sfba.social/@drahardja/114723617680343066
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