AI Is Killing Junior Jobs, Here’s What’s Replacing Them | Ep. 3036

Okay, so get this. There's an AI study on 62 million workers, over 285,000 companies or firms, and it shows that relative junior hiring has dropped by 12% at AI adopters. So I'm pulling up a graph for you all to see right now.

Okay, what do you mean junior hiring?

Okay, so junior hiring, look, if you look at this graph over here, seniors mean like someone that's a senior-level hire.

Oh, you're talking about like entry-level?

Yeah, yeah, entry-level hires like interns and things like that, or people coming out of college, right? So you can see here juniors over time, you can see the different quarters, like 2023, 2022, and all that. After AI comes out around 2022, it starts to decrease over time. And then in the blue here, seniors are still continuing to go up. And so this is— there's been a couple of these studies already. We talked about the 70,000 Filipino study and how the recruiters, 72% of people or so, they prefer the AI. And so this just shows that the gap is getting larger and larger. And I just saw something the other day where on, I think it was CNBC, your favorite channel, where they were talking about how it's actually going up the stack now. So it's Not just juniors anymore, but it's going up to seniors. And what I also think is interesting here is check this out. So there's this U-shaped graph over here. This is tier 1. Number 1 here is like a Harvard, for example, a tier 1 college. Okay. And then you have tier 2 college, tier 3, tier 4, tier 5. So 5 is like tier 5 is like the lowest college. Okay. So you can see for a Harvard type of deal, the decrease in juniors is less than the other ones, tier 2, 3, 4, 5. it is significantly less versus, you know, tier 1 and tier 5. So that's interesting to me, 'cause if you're a tier 5 college, for some reason you have the least decreases, and then Harvard would be the second, or like a tier 1, like a Harvard would be like number 2. So we're seeing a massive decrease.

Tier 1 colleges are seeing some decreases, but tier 5 is seeing the least amount.

Correct, yeah. And so my—

And what, for what type of positions? All positions or just the junior positions or just—

Just juniors.

Okay, just juniors.

And then one more thing before we kind of react to this, one too, is it's not just IT related too. So if you look at seniors versus juniors, juniors are in the red over here, seniors are in the blue. You can see for health, seniors are still continuing to— wait, percentage change in number of hires. Okay, so in healthcare and social, it's gone up the most. And then you can see the percentage change for juniors over here, -20%, -40%. So seniors are getting hired more, right, for health. And then when you look at these other roles over here, it's almost all decreases for juniors.

So the right side, of the chart is going up. So that means they're actually seeing increases. Correct. The left side is seeing decreases.

Yeah. Manufacturing seniors, they're not hiring as many. It's almost a zero.

Yeah.

Yeah. And then manufacturing, oh my God, it's like -20.

Oh yeah, you're right. Because the seniors for healthcare is actually increasing, but the juniors are actually decreasing.

Yeah. 25% up for healthcare. But then you go all the way to manufacturing on the left, it's basically zero. So they're holding steady at these other ones, or they're increasing a little bit for seniors, but for juniors it's less. And so what this tells me, because we've talked about this, you're doing this and I'm doing this and we have friends doing this, the only juniors that we're hiring are extremely big on AI. They have to give examples, they have to talk about workflows. And I remember I was interviewing someone recently, I was like, so rate your AI fluency on a scale of 1 to 10. She's like, 10. I was like, uh-oh. Like you never want to rate yourself a 10 first and foremost.

No.

But then I was like, okay, so 10, like, so you built like agentic workflows, you built like agents and things like that? Oh, she's like, oh yeah, I've done all of that. I was like, okay, so can you give me an example of like a tool or workflow that you built? And she's like, Oh yeah, I'm sorry, I just got certification. Oh, so you basically lied to me.

And then they rate themselves as a 10. Yeah, that's like a 1.

How could you rate yourself as a 10? You're just doing certifications, right? So, you know, in my mind, I'm like, look, it's— this is how if you're a leader in your company, you have to— if you're going to hire juniors, you have to hire people who are AI native, who are really big on it, who are obsessed about AI, because this gap is going to get bigger. And this is already starting to bleed over into more mid-senior level roles, and it's going to bleed over into senior. And I'm not particularly— I don't think this gives you and I joy by any means, but it's happening. Look, you look at this graph over here, seniors is going up, but look, it's starting to flatten over here, whereas juniors is starting to trend downwards, total is starting to trend downwards. This is going to happen for a lot of roles, even for your role and my role. If we're not on top of it, yeah, we're gonna be in trouble too.

Dude, I totally agree. But this chart, I'm assuming the total, is it accounting for mid-level too? Because juniors are entry-level, seniors like executive.

I think I I think if you're— I think it's just looking at this graph, it's only seniors and juniors. I don't think it's accounting for the middle.

Got it.

Yeah. What do you think?

Yeah, I think AI is going to have an impact on a lot of jobs. It already is. It already is. Google, there was an article that ended up coming out that Google has decreased mid-level managers, but it was by 30%. Google mid-level managers. I see so much stuff. Yeah, 35%.

Yeah.

So Google has eliminated 35% of managers overseeing small teams in the past year, and no one has proof of it, but they're saying, is AI the reason? Is, you know, is this is why Google doesn't need as many people?

Yeah.

And I don't know for certain, it could just be a restructuring. It doesn't look like Google went out there and made a statement being like, yeah, we're eliminating a ton of people using AI, because that sounds bad itself. And I don't see corporations volunteering that information. Yeah. True or not, yeah. And that 35% could have been for other reasons as well. But you're you're going to see it, and you're also going to see the flip side in which people aren't certain yet what AI is better than humans for or what it's worse. A great example of this is Taco Bell and their Wall Street Journal article. Their drive-thru, yeah. They're thinking about getting rid of AI, so they did a small test in which for the drive-thru assistance they had some. Humans going out there and saying like, or AI saying like, hey, what would you like to order? And in some cases it worked really well. Some cases it worked so bad. I think one person asked for like 1,800 cups of water, something ridiculous like that. So he can get in touch with a human.

Yeah.

But yeah, different organizations are testing different things and Taco Bell's just like, oh, for our drive-thrus that are busy and have long lines, we're thinking of keeping humans. For the ones that are shorter, don't have as much lines, we're thinking of using AI. But in essence, what they're saying is for busy lines, it's not necessarily just about efficiencies. It's— how I'm reading this is when you have a lot of lines and you need people constantly, that of course costs money, but it shows that the human's probably messing up less.

Yeah.

So it just moves the line through. But if you have a drive-through with very few cars coming through, you use AI instead, you're saving some money because you don't need a full-time human. And even if they mess up a little bit here or there, the cost of fixing it is probably cheaper than hiring a human.

All right, so I wanted to take a moment to tell you about my podcast co-host Neil's agency called NP Digital, and they work with a whole host of global companies or a global organization. Also, Neil has SEO tools such as Ubersuggest and AnswerThePublic. All you have to do is go to npdigital.com to learn more, and we'll see you on the other side. Yeah, so I think it's what's going to happen is even if we use the Taco Bell example, maybe AI will do 70-80% of the work, but you still have a human loop for 20-30%. And that's still a lot of efficiencies ultimately. And I do think we're going to move into a world— this is a little more philosophical, but most people will have universal basic income to supplement. And I think I also believe in what Elon said about universal wealth. I think universal wealth will happen probably 10, 15, 20 years out. There's going to be a period of adjustment. But I think if you want to get ahead of this and maybe you don't want to rely on universal basic income, what you do is you arm yourself with the knowledge here, you stay curious, and then you are constantly building on yourself. You're building skills to make yourself more marketable, and then you won't have to worry about this. This is why I think tier 5 schools, maybe those people are They might be a little cheaper. But also you have, I think a lot of people that go to tier 5 schools, sometimes they are more, for example, you went to a Cal State, right? A Cal State is a decent school, but it's not a tier 1 school by any means, right?

Decent school?

It's an okay school. It's an okay school.

It's probably towards the bottom end.

Okay, so what tier do you think that's in?

Definitely tier 5. That's the last tier, right? There's no tier 6?

No, there's only 2. Let's just say in this scenario, there's only tier 5.

Okay.

So, and I went, I barely got into UC San Diego, right? Transferred from UC Riverside.

I would consider it a tier 3 school.

Tier 3? Well, I think I was at a tier 4, tier 5 at UC Riverside. Okay. So I'm saying we're like the same person.

You know, you're UC San Diego.

I finished at UC San Diego, but I started at UC Riverside. Yeah. So, okay. Let's assume I'm tier 3, tier 4, but you and I both worked our butts off. And I think people that go to tier 5s, a lot of them will, not a lot of them, but there's, there's There are a select few that will work their butts off. A lot of the people that didn't do well in school end up doing really well as a business person or a leader.

So a lot of my friends that are wealthy ended up going to Ivy League or Stanford. You can say it's not Ivy League, but close enough. Stanford's up there. Yeah.

It's never tier 1. Yeah.

Yeah. And I've hired a lot of people and my buddies have hired a lot of people. And there's one thing I would say most of us feel really consistent about. When we tend to— we've all hired from these tier 1 schools all the way down to tier 5. It's not this case always, but a high percentage time. And when I say high percent, well into the double digits, what ends up happening when we hire people from tier 1 schools is they feel not necessarily privileged or act privileged. It's more so they felt that they spent so much energy and they put in so much effort to get into one of these tier 1 schools that they deserve a lot. Right. So maybe some sense of entitlement, not with all people, but quite a few of the people we've interviewed. And that's a lot of the reasons why we feel candidates from tier 1 schools don't always work out. But on the flip side, when we interview people from tier 5, tier 4, tier 3, they're more hungry. Like my CEO, I believe he's from Arizona State University. I don't know what tier that would be, but I'm going to guess 5.

I think tier 5. Yeah. Yeah.

And the guy just works his tail off. He's in Cuba right now on a family vacation. All right.

He's Cuban?

Uh, no, his wife is.

Okay.

And they're going seeing their parents, can't always get out of the country, so they go see them. Yeah. And it's a holiday. I know he has a client call today, a potential client call and a pitch, and he'll figure out internet and everything.

And his pitch today, it's Labor Day.

Yeah, he doesn't care.

Wow.

Right? Because that was when their assistant gave time. And this is a multi-billion dollar company, not like 1 or 2 or 5, like well, well, well into the billions.

Yeah.

Doesn't care.

Yeah.

He'll do whatever for work and business and grind it out. And I don't know the last time he didn't work on a Saturday or a Sunday.

Yeah.

I know he's been better now and he doesn't work Christmas or Thanksgiving, But when I say he doesn't work Christmas or Thanksgiving, he probably spends at least 30 minutes to an hour checking emails, making sure there's no fires or anything, even on a holiday.

That's fascinating. But you remember, so again, like you and I have met a lot of people, tier 5, they maybe they aren't necessarily the best book smart-wise, but they're very street smart, very, very practical. When you look at tier 1, you look at what Jensen said. So I was rewatching a video today this morning and one guy was asked, so, you know, what would you say to the Stanford students over here? This guy's like, sitting, right? He's kind of like a little overweight too, but he's like, yeah, so what do you think about like, you know, the Stanford, like what lessons would you give to our students here? And then Jensen's over here, he's like, pauses, he's like, you know, if I were to say any one thing, Stanford's an amazing school. You guys really work really hard, you know, best of the best students, you know, top school and one of the top schools on the planet. But, you know, what I've learned is that people that go to schools like this, right, have very high expectations and people that have very high expectations have very low resilience.

And there's a certain entitlement that he's basically saying that, right?

Yeah. Yeah. And he's saying like—

So similar.

Yeah. Similar thing to what you're saying. And I do see that. I will say though, there are a couple of Harvard people that I worked with. We have someone on our team from Harvard and they're amazing, right? They work really hard. There's a massive chip on their shoulder. And I appreciate that. But I've also worked with people at Harvard where my first job that I got coming out of college was data entry. So I was making $30,000 a year. I was only like 22 years old or so. And I saw a guy that was doing the same exact work I was doing, data entry, 30 years old, went to Harvard and had no energy. No, no. I think he thought life was done after he went to Harvard. And I'm just like, yeah, it has nothing to do with the school that you go to. It really has. It really just comes down to how hard you continue to push and how hard you're willing to push.

Yeah. And Stanford and Harvard produce great people, especially the ones who are willing to grind it out. And I've seen a lot of amazing entrepreneurs come from there. There's There has to be tons of amazing workers. I hear more about the entrepreneurs, of course, because a lot of them have made billions of dollars and you know a lot of them as well. And we're not talking about personally, but you know, you just go on the Forbes list. A lot of those people went to Stanford and Harvard, at least in tech. But when you look at employees, I find that you get people who are just willing to grind it out after they graduated from like the Arizona State University is like, all right, I got to get my crap together. You got to get my life and just push hard. And a lot of the people that I've interviewed from, let's say, Stanford are just like, I did so well and I got into this school. Yeah, you know, my life should be easier, but that's not reality. Yeah, they just believe in that.

It's because we've been brainwashed as kids. I don't know about you, but for me, I was always like, oh, go to Stanford, go to UCLA at the very least. So it was very much a brand thing growing up Chinese, right? Asian. And so, but you realize none of that matters at the end of the day. What matters is how much you contribute to the world. And if you want to contribute more, that means you have to continue to grow.

So So I look at Thiel. Thiel went to Stanford. I don't know where he got his law degree from, but let's just assume Stanford. I believe he has 2 kids, right?

Actually, I don't know.

It's something like that. And he has a program and a lot of good companies, like I believe Figma was one of them, came out of his—

Thiel Fellows.

Yeah, exactly. Where he'll pay you money not to go to college. And I'm a big believer that in today's world, you don't need a tier 1 college and you don't even need a tier 2, 3, 4, or 5 college. And it's all pretty much useless for most professions. Not all. Some, like maybe a doctor is still required.

Architect. Yeah. Yeah.

Yeah. Uh, an architect, do you even need to go to college for that?

I don't know. I think there's a, there's a good amount to study. You can ChatGPT it.

Oh, there is?

No, it's like shaking his head yes. Architect, doctor, um, like a, I don't know, like an engineer type deal. Yeah. Yeah. So, but here's what—

Engineer? No.

Not a computer engineer. I'm talking about like structural engineer. Oh, got it. Yeah. But do you know what's interesting? You take a look at this. I don't want to digress too much, but take a look at Alpha School for your kids. There's a guy, I think his name's Joe Lamont. He founded Trilogy Software, very successful back in the day, right?

Yeah, I know.

Very successful guy, right?

So he created Alpha School?

So I think it was his friend that created it. He's now the principal of it. So the way they make it work is he gamifies it, I think, for the kids and he makes learning very fun, right? And he believes that because generative AI came out a couple of years ago, now he's all in on Alpha School and he wants to change education. And so check out Alpha School because I think future of education is it's all gonna be personalized for children and it's all gonna be gamified. It's all gonna be fun. And you and I, I think you, we would've figured out by age 5 or 6 that we were probably entrepreneurs already. 'Cause I think by age 9 I was already building websites and things like that. I just got detracted by, distracted by games. You were probably in the, like you started your first business at what, 12 years? You're selling CDs at what?

Teenish.

But when'd you start selling CDs?

I don't know, like 13, 14.

Exactly. So it was there the whole time, right? But what if you got to, I think you and I at age, even at age 6, we could've started.

Yeah.

Yeah.

Oh, cool.

Yeah.

I didn't know Joe was a principal of Alpha School. They don't have one in Los Angeles, but yeah.

You know Joe?

Yeah.

Okay, great. There you go.

I worked with him.

There you go.

At Trilogy.

Okay, there you go.

So I know quite a few of his team. Andy ended up leaving Tribe and then he ended up creating his own fund. But yeah, Joe is a billionaire from Apple and Amazon stock.

Yeah, he bet hard. He pressed hard. That's another thing.

It's a—

so they talk about slugging percentage, right? How hard are you willing to bet when the timing is right? And he pressed his chips. And we talked about this last time too. You have to be willing to press your chips. Yeah.

No, I didn't know he was in charge of Alpha School, but I was talking to Lloyd and he's in Austin. He was telling me about Alpha School. We send him to a really great school here called Merman. And it's an amazing place for education. And they just teach your kids as far as they'll go. So if they're like 5, but they do college-level math, they'll give 'em college-level math and encourage everything.

So here's the thing. Joe Lamont has been a billionaire for a very long time. Very low profile. He hasn't done a podcast for a— I don't think he's ever— that, that was the first podcast he did on Invest Like the Best. So I was—

I'm listening to that, right? He spoke, he has public speaking gigs. Yeah. And his daughter goes to Stanford, if I'm not mistaken.

I think he sent his kids to Alpha School too. So originally someone that founded it, I think her name's Mackenzie or something. He was like, oh, I'm not going to send my kids to this. Eventually it got better. And then I think he's like, okay, I'm going to send my kids to this. So I think it was Alpha School plus you send them to Stanford. But—

He's really book smart.

Yeah.

And then his dad was number 2 at GE under— was it Jack Welch who used to run it?

Yeah.

His dad was number 2.

That's cool. So good upbringing.

Well-connected family.

But I think the future of this is personalized gamified education. Personalized to personalize it to your likings and then gamified to keep you engaged. Yeah. Yeah, that's what's gonna happen. And you're probably seeing it with your kids as well. And that is it for today. We'll see you tomorrow.

Bye.