AI Disruption Hits Gen Z Workers Hardest as Experienced Employees Thrive

New research from the Federal Reserve Bank of Dallas shows AI adoption is benefiting older workers while leaving younger, less experienced employees struggling to find jobs.

Published on Mar. 4, 2026

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While millions of Gen Z workers face unemployment in the white-collar AI 'job apocalypse,' older and more experienced workers are faring well, according to new research from the Federal Reserve Bank of Dallas. The study found that in AI-exposed industries, the technology is actually helping experienced workers elevate their work by outsourcing tasks to AI and allowing them to focus on more valuable work. In contrast, entry-level workers with primarily codifiable knowledge are being displaced as AI can easily automate their jobs.

Why it matters

This research highlights the uneven impact of AI adoption, with younger workers bearing the brunt of job losses while their more experienced counterparts see wage growth. It raises questions about the future of entry-level employment and the need to rethink how new employees gain on-the-job experience.

The details

The Dallas Fed study, authored by assistant vice president J. Scott Davis, analyzed wage data since fall 2022 and found that 'returns on job experience are increasing in AI-exposed occupations.' Young workers with primarily codifiable knowledge and limited experience are facing challenging job markets, while older workers with understanding gained through experience are seeing their wages grow. This trend is not limited to the U.S., with a similar pattern observed in Ireland where employment for younger workers dropped by 20% between 2023 and 2025 while growing 12% for 'prime-age' workers.

  • The Dallas Fed study analyzed wage data since fall 2022.
  • A February 2023 report from the Irish Department of Finance found employment for younger workers dropped by 20% between 2023 and 2025.

The players

J. Scott Davis

Assistant vice president at the Federal Reserve Bank of Dallas and author of the study on AI's impact on wages and employment.

Boris Cherny

Creator of the Claude Code at Anthropic, who says the title 'software engineer' could be extinct by the end of 2026 as AI takes over coding tasks.

Nickle LaMoreaux

Chief human resources officer at IBM, who announced the company is tripling the number of Gen Z entry-level jobs despite the threat of AI.

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What they’re saying

“If AI were simply automating jobs, we would expect both wages and employment to decline.”

— J. Scott Davis, Assistant Vice President, Federal Reserve Bank of Dallas (Fortune)

“Returns on job experience are increasing in AI-exposed occupations. Young workers with primarily codifiable knowledge and limited experience will likely face challenging job markets.”

— J. Scott Davis, Assistant Vice President, Federal Reserve Bank of Dallas (Fortune)

“When I think back to engineering a year ago, no one really knew what an agent was, no one really used it. But nowadays it's just the way that we do our work.”

— Boris Cherny, Creator of Claude Code, Anthropic (Fortune)

“The companies three to five years from now that are going to be the most successful are those companies that doubled down on entry-level hiring in this environment.”

— Nickle LaMoreaux, Chief Human Resources Officer, IBM (Fortune)

What’s next

IBM's plan to triple the number of Gen Z entry-level jobs could provide a model for other companies looking to support younger workers impacted by AI disruption.

The takeaway

This research underscores the need for companies and policymakers to rethink how new employees gain on-the-job experience in an AI-driven economy, as the traditional model of relying on entry-level workers to slowly build knowledge is becoming increasingly cost-ineffective.