Approaching the ever-evolving jobs market: An Economics Student’s Perspective
As we head into the midst of summer, we will be updating you with our July performance numbers in two weeks’ time, before a brief summer recess. We will return on 29th August with ‘Question our Investment committee’ , so if you have any questions you would like to put to our team around investment markets, our portfolios, or perhaps you have a question around the current political and economic landscape, whatever your thoughts, feel free to post to questions@amberriverdbwood.com.
As a refreshing break from our usual content, many of our clients will recall that we run an internship program each year to provide experience and development for students at schools, colleges and universities. This can often have mutual benefits, with 20% of our current team having been introduced via programs of this nature. This week’s blog takes the views of one of our current interns, George, who is studying Economics at Edinburgh University. George’s views, I think, are fascinating, not just for parents and for students, but also for all who are concerned about the future shape and direction of the workplace over the years ahead. In this respect it is an especially interesting time, given the increasingly fast pace of technological advancements. Hope you enjoy and have a great weekend!
There is an apparent negative feeling surrounding the current and future job market for students. Conversations with friends, and the prevalence of online negativity do not paint a pretty picture for our young people’s career prospects. An already tough job market with future turbulence guaranteed, but it may not be as awful as it seems.
The current state of the job market is uncertain, with unemployment ticking up to 4.5% and real total pay growth ticking down to 1.7%. Both are in better places than they have been but have slightly concerning directions. However, the big worry of a graduate today is not unemployment, but underemployment where their skills will not be utilized properly. This is a growing issue for fresh graduates, which harms prospects and can quickly become chronic. A degree is no longer enough for many entry level jobs and industry experience has become more important than ever, while internship opportunities are declining and becoming increasingly competitive. There are already concerns about the labour market, and AI seems like it is going to play a large role in its future.
AI has only become more prevalent in the conversation since the release of ChatGPT in November 2022. Whether AI will replace or just enhance current jobs is still up for debate. Either way there will certainly be a large impact on nearly all industries.
The productivity increases that may result from these could create displacements as it takes fewer people to complete the same tasks. AI is not the first major technological change to affect the job market, and hopefully it won’t be the last. Historically major technologies, from the loom to the internet, displaced jobs but also created new industries, often leading to long-term net gains in employment. The problem for university students is predicting where these jobs will be and what skills they will require. While our predecessors already have established careers and the next generation will know where the jobs have been created, there will be a transition generation who must figure it out.
While the future is a mystery, AI’s effects are already being felt in the workplace and in universities. AI is already being implemented in many workplaces as firms worry about missing out. You will also find it hard to find a student who has not used ChatGPT to some extent to help with an assignment, especially in coursework heavy degrees, and while AI’s effects on the education system will be felt, it is also letting people send hundreds of applications a day for jobs. Jobs listed online are receiving multitudes more applications, leading to less trust in each applicant and far more time spent looking through them. The already anonymous feeling online application process is becoming increasingly detached from reality.
While the future job market may be uncertain it is not necessarily bleak. A general intelligence that can completely replace humans still looks a long way off and hopefully it will act like previous technological advancements and lead to a more efficient society and plenty of jobs to replace the ones left behind. It is up to today’s students to figure out which jobs will stay and which will be created, or risk being left behind.
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