AI is killing entry-level jobs among start ups

But the NBER study claims that it is consolidating senior, better paid jobs

A new National Bureau of Economic Research (NBER) working paper on generative AI and entrepreneurship points to a sobering but important reality: AI may not simply destroy jobs or create jobs in the abstract. It may do both at once, but not for the same people.

The authors find that startups with higher exposure to generative AI reduced employment quickly after ChatGPT, especially in junior and implementation roles, while productivity and financing outcomes improved.

At the same time, AI seems to be helping generate more startups, with more numerous but smaller investments and a rise in new firm formation.

That is a striking result. It suggests that AI is not only making companies leaner; it is also changing the kind of labor market those companies create. Entry-level workers appear especially vulnerable. The paper finds that employment reductions were concentrated among less senior employees, that about half of exiting workers faced roughly six-month delays in reemployment, and that many moved into lower-paying but less AI-exposed jobs.

But it is important to note that the employment generated by new firms largely offset overall losses in the aggregate, but with a shift toward managerial and senior roles.

From a Catholic perspective, this is exactly the kind of disruption that demands moral seriousness. It is good when technology raises productivity, lowers barriers to entrepreneurship, and helps create new firms. But it is not enough to celebrate “net neutrality” in total jobs if the actual burden falls hardest on younger workers trying to enter the economy.

A labor market that preserves opportunity only for the already skilled, already senior, or already established is not healthy simply because the aggregate numbers balance out. That is not how solidarity works.

So the warning here is plain. AI may expand dynamism at the top while narrowing entry at the bottom. If that is true, then the task is not to resist innovation as such, but to insist that innovation be accompanied by formation, retraining, and real pathways for younger workers whose first rung on the ladder is being kicked away.

Otherwise, AI will not abolish work. It will merely make access to dignified work more uneven. And Catholics should be among the first to say that this is not a side effect to be ignored, but a justice question to be confronted.