Workforce Development: A Crisis in Entry-Level Hiring
June 4, 2025 | Written by Marc Casale
A Crisis in Entry-Level Hiring
Welcome to Kinetic Signals, a new content series from Kinetic West where we track the turning points reshaping opportunity, equity, and systems change.
This edition takes on one of the most overlooked stories in today’s labor market: entry-level jobs are quietly disappearing–and we’re only beginning to see the ripple effects.
What We See
In early April, we published a blog post outlining what we believe is in an emerging crisis in entry-level hiring, driven by underlying economic instability, declining educational attainment, new technologies disrupting labor markets, and the lingering effects of COVID-19.
Since then, the conversation has caught fire. In his excellent article in The Atlantic, Derek Thompson cited the New York Federal Reserve saying “labor conditions for recent college graduates have “deteriorated noticeably” in the past few months.” His analysis points to the similar trends we’re seeing: a slowdown in tech hiring, growing skepticism about the ROI of a college degree, and the early impact of generative AI on demand for entry-level workers.
Traditional metrics – like the unemployment rate and labor force participation – are noisy, but the trendlines aren’t promising. And more targeted indicators, like entry-level job postings, are clearly in decline.
While different researchers have different takes on the “why,” we see three core drivers and interacting together to create a perfect storm for new job seekers:
Shifting business cycle: Major employers are focused on bottom-line over growth and looking for ways to save money.
Impacts of Generative AI: Whether we believe it (maybe?) or like it (definitely not), it’s clear that GenAI is being used as a cost-saving tool when it comes to early-career knowledge work.
Erosion of public support for entry-level jobs: Programs like AmeriCorps, that have long helped young people start their career are getting the axe.
At this point, we don’t think we’re seeing a blip. This feels structural.
What It Could Mean
For starters, we are going to need to rethink what makes a good entry-level job.
If in today’s market, MBA’s and CS Major’s are striking out, then we need to recalibrate on which jobs are truly in-demand and which offer real opportunity for real young people.
This might mean that more young people are going to find themselves in traditional entry-level jobs (we’re starting to think of them as “on-ramp” jobs) like customer service, hospitality, sales, construction or frontline healthcare. Jobs like this have long been shunned by many within the workforce development space because they don’t meet semi-arbitrary cut-offs for wage, progression, or job growth.
While it’s true, they may not pay as great out of the gate, they are open, low-barrier, and a proven path for young people to start their careers. Rather than deriding these experiences, we need to make them pay more and pay off down the line through transferable skills and upskilling. At this point, in this market, getting started is as important as where you start.
But we can’t have big employers giving up on entry-level hiring. It’s not good for their long-term growth, it’s not good for their company culture, and it’s definitely not good for public confidence…which is at least a 25 year low (which is just as far back as this data goes).
This is a “dare-to-be-great” moment for the private sector. A time to stand for something. Helping young people start their careers is a beautiful, natural thing for business to stand for.
And at the same time, this is also a public good. For years, the public sector has invested as such through programs like Americorps, federal work study, clinical placements, and numerous tax credits and reimbursements like (OJT reimbursement, Work Opportunity Tax Credit, Ticket to Work Programs). These programs have helped young people gain early experience while reducing the cost and complexity for employers. And they’re now at risk.
Will we also see renewed calls for mandatory public service to help young people launch their careers and build connections? It might be time to think that big if we don’t want to lose this generation.
If the federal government doesn’t step in, we expect to see States try to get involved in both employer incentives for entry-level hiring and service corps programs to fill the gap and support young people and employers.
Silver lining? If current trends hold, we wouldn’t be surprised to see a rise in graduate school enrollment, which is what we got during the 2008 recession. That would be a major boon to colleges in dire financial straits.
This isn’t just a downturn, it’s a structural break.
Next week in Part 2, we’ll look at what might fill the vacuum. As tech hiring recedes, what will take its place? (Hint: It wears scrubs.)
Further Reading:
Kinetic West blog post The Death of Entry-Level Jobs: https://www.kineticwest.com/on-our-minds/the-death-of-entry-level-jobs
Derek Thompson Article: https://www.theatlantic.com/economy/archive/2025/04/job-market-youth/682641/
New York Fed Data on Youth Unemployment and Underemployment: https://www.newyorkfed.org/research/college-labor-market#--:overview
Federal Reserve Unemployment Rate: https://fred.stlouisfed.org/series/LNS14024887
Federal Reserve Labor Market Participation: https://fred.stlouisfed.org/series/CIVPART
Gallup poll on public sentiment re: big business: https://news.gallup.com/poll/5248/big-business.aspx