Everyone Blames AI for the Gen Z Job Crisis. The Fed Says Not So Fast.

AI may replace us all one day. But it’s not fully responsible for why Gen Z is having such a hard time finding a job right now.

A new study from the Federal Reserve Bank of St. Louis found that the unemployment rate among 18- to 24-year-olds rose 2.9 percentage points between April 2023 and late 2025 because of a shortage of job openings, according to Bloomberg. That’s more than double the 1.1-point increase attributed to employers shifting toward AI-related roles and demanding more specialized skills.

“Since April 2023, hiring has slowed, and young workers, especially new entrants, have borne the brunt of that softening,” the study’s authors wrote. “AI adds an additional headwind at the point of labor market entry, but its effects remain smaller than those of the broader decline in job openings.”

The findings echo a separate Federal Reserve Bank of New York study on remote work and young workers that reached a similar conclusion: Young people aren’t being replaced by robots. They’re being squeezed out by a weak hiring market.

AI may replace us all one day. But it’s not fully responsible for why Gen Z is having such a hard time finding a job right now.

A new study from the Federal Reserve Bank of St. Louis found that the unemployment rate among 18- to 24-year-olds rose 2.9 percentage points between April 2023 and late 2025 because of a shortage of job openings, according to Bloomberg. That’s more than double the 1.1-point increase attributed to employers shifting toward AI-related roles and demanding more specialized skills.

“Since April 2023, hiring has slowed, and young workers, especially new entrants, have borne the brunt of that softening,” the study’s authors wrote. “AI adds an additional headwind at the point of labor market entry, but its effects remain smaller than those of the broader decline in job openings.”

The findings echo a separate Federal Reserve Bank of New York study on remote work and young workers that reached a similar conclusion: Young people aren’t being replaced by robots. They’re being squeezed out by a weak hiring market.