Adoption of artificial intelligence is soaring in New York City, but the great AI jobs apocalypse is nowhere in sight — except in entry-level tech positions, where demand has plummeted, closing off a key avenue to well-paying jobs for young workers.
A survey by the Federal Reserve Bank of New York released earlier this month showed 60% of service firms now use AI, up from 40% a year ago. Half of manufacturers surveyed are using the powerful and controversial tool, twice as many as a year ago.
But employment at tech companies in New York City, the key sector where AI is taking hold the fastest, remains stable, according to the nonprofit Center for an Urban Future.
New York has also recorded an increase of about 60,000 jobs over the last year, according to July data from the state Labor Department. That includes small gains in finance and professional services, two other fields quickly adopting AI.
‘Intense Competition’
But ads for entry-level tech jobs — a critical foot in the door for young New Yorkers, including some with two-year associates degrees — have plunged by half since 2022, according to a new analysis by the Center for an Urban Future.
“Entry-level postings have fallen off a cliff and the first rung of the ladder in tech is under pressure,” said Jonathan Bowles, the center’s executive director.
“For many years, these were amazing opportunities for people getting a job because tech was growing so fast and adding so many entry-level jobs,” he said. “Those positions for young people with limited experience are harder to come by and there is intense competition.”
The center’s report said companies with the highest exposure to generative AI saw the biggest declines in entry-level jobs and had offered the highest average salaries, around $89,000, to new hires. But those already working in tech, finance and professional services like law and accounting are unlikely to see their jobs taken by artificial intelligence any time soon as AI continues to expand in New York, even as concerns of AI’s ability to escape human control skyrocketed last week.
More AI, Bigger Workforces
In New York, the companies embracing AI most enthusiastically are those that are also growing and need to expand their workforces.
Implementing AI at large companies is going to take years because it requires reengineering the work in millions of jobs, experts say. Even coding and other software applications that can be easily done by AI still appear to require human intervention.
“We overhype things,” said Greg Morrisett, dean of Roosevelt Island-based Cornell Tech, which is at the center of AI work in New York. “AI has probably made the most progress on writing and testing and reviewing code compared to just about any other discipline. But even there, companies are going to realize, ‘Oh my gosh, we need engineers to manage all this process.’”
Surveys show the heaviest AI adopters are growing companies, said Ben Zweig, an economist and founder of New York-based Revelio Labs, a workforce intelligence company that uses public employment data and AI to track labor market trends. Those companies are adding both AI and workers.
The businesses that have put the brakes on hiring, especially for recent college graduates, are assuming AI will allow them to reduce employment, Zweig argues.
The New York Fed report comes to the same conclusion.
Ten percent of the companies using AI say they are hiring more workers, especially those with AI expertise, and a third say they are retaining their employees. Less than 5% have cut workers, while 15% say they have reduced hiring. The report is headlined “Businesses Are Using AI to Transform Work, Not Cut Jobs.”
Announcements that companies are reducing their workforces because of AI — such as financial services provider Block’s claim earlier this year that the new technology would allow it to reduce staff by 40% — are also likely hype. Changing the nature of a job isn’t easy, Zweig said, and the worst time is when a company is downsizing and people are already overwhelmed with work.
Some AI companies are finding strong demand in industries with chronic job shortages.
EliseAI, a five-year-old company headquartered on Fifth Avenue near the Empire State Building, expects by the end of the year to reach 1,000 employees selling tools that help property management companies more efficiently run their operations and workforces.
“I’ve been in this industry for a while and my father was in affordable housing before me,” said Francesca Loftus, EliseAI’s chief experience officer. “I have never heard anyone in the industry say we are well-staffed.”
Anyone with AI skills is in demand.
The Center for an Urban Future study shows entry-level postings for jobs requiring AI skills have grown 20% since 2022 across a range of industries, including professional services, finance, healthcare and education. Tech workers with skills in fields such as security and data analysis are also being recruited.
Cornell Tech graduates are founding AI companies and finding jobs in tech and finance companies, Morrisett said. The school has produced 130 startups, a 40% increase in two years.
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For those without AI experience, the barriers have become much higher.
The Marcy Lab School, a tech training organization with fellowship programs in software engineering and data analytics, has seen a 35% decline in its employment rate since 2023, executive director Reuben Ogbonna told the Center for an Urban Future.
Per Scholas, whose free tech training programs are highly regarded, is scaling back many of its software engineering courses while it moves to incorporate AI across its curriculum, said spokesperson Mackenzie Pedersen.
Zweig notes the adoption of AI to screen job applicants is hurting all entry-level workers because it results in both employers and job seekers being overwhelmed with applications.
Internships to Jobs?
The Center for an Urban Future proposes a series of initiatives to restore the entry-level tech pipeline. Those include six-month paid internships for emerging tech workers in small businesses, nonprofits and city agencies to give them the experience they need; a workforce readiness fund to support training programs at the City University of New York; and the city recruiting 100 large employers to offer AI-oriented internships.
The Mamdani administration didn’t specifically address a question about whether it endorsed these recommendations, except to note it has provided CUNY with $5 million to strengthen its AI offerings.
“The Mamdani administration recognizes that artificial intelligence has enormous potential, but we are equally clear-eyed about the serious risks it poses,” spokesperson Cassio Mendoza said. “We will carefully evaluate the potential impacts of AI, develop policies that protect New Yorkers and ensure our workforce is prepared for the jobs of tomorrow.”
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CUNY has unveiled a series of steps to prepare its students for AI, including awarding $3 million for 113 campus-led initiatives as part of its AI Innovation Fund, partnering with companies such as Accenture to offer free access to its AI courses taught by industry professionals, and creating CUNY Beyond, an effort to link students with internships at municipal agencies and nonprofit organizations.
If the optimists are right, the entry-level problem will be solved and the jobs implosion may never occur.
“Three things will have to be true to see major disemployment,” Zweig said. “Employees can’t change what they do. The jobs eliminated are in specific regions. And workers are not mobile and can’t relocate.”
But if workers can be retrained or move as necessary, he added, “We have nothing to worry about.”