❝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.

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.

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!

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 often 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.

@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.

@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 seems to have preceded the “how.”

@inthehands They’re holding AI over our heads, now, saying, “You better watch out. We can replace you.”

I kind of think it’s a bluff, to be honest, and it’s going to hurt a lot of people and a lot of companies, in the long run.