Artificial intelligence often tops the list of threats to new entrants to the labour market. However, the latest analysis by economists at the Federal Reserve Bank of New York points to a different problem: the rise of remote working.
According to the New York Fed, unemployment among young university graduates has risen from an average of 3.1 per cent between 2017 and 2019 to 3.7 per cent between 2022 and 2025. The researchers estimate that the rise in remote working may account for as much as 64 per cent of the increase in unemployment within this group. The sharpest deterioration is seen in occupations that are relatively easy to perform remotely.
The reason is quite practical. Data from a Fortune 500 company indicates that employees sitting close to more experienced colleagues were more likely to receive feedback and support. In dispersed teams, the company was more likely to hire people with greater experience, who required less induction.
This does not mean that AI has no impact on employment. However, another analysis by the New York Fed shows that the slowdown in recruitment began before the rapid rise in the popularity of generative AI. Companies also report retraining staff more often than cutting jobs due to AI.
This finding is particularly relevant at present. In July 2026, the US economy created 23,000 fewer jobs, and employment growth has clearly slowed. For businesses, this means that the cost savings resulting from remote working may come with a hidden cost: greater difficulty in building future workforces. The result may be a greater emphasis on hybrid models, mentoring and a more structured induction process for junior staff.
