Spooked by AI and layoffs, white-collar workers see their security slip away

Office workers are filled with anxiety.

- Rachel Louise Ensign

Sectors with a lot of office workers, like information and financial activities, shed jobs in October and November.

(ISTOCKPHOTO)

Tuesday's jobs report was the latest ominous sign in an era of big corporate layoff announcements and CEOs warning that AI will replace workers. The overall unemployment rate ticked up to 4.6%. Sectors with a lot of office workers, like information and financial activities, shed jobs in October and November.

Hiring in many industries that employ white-collar workers has softened this year, according to Labor Department data, while the unemployment rate for college-educated workers has drifted higher.

Fears about the job market are contributing to widespread pessimism about the economy. The University of Michigan's index of consumer sentiment is near historic lows. Many Americans are buckling under almost five years of persistent inflation. College-educated workers who were once insulated from economic concerns aren't anymore.

Just a few years ago, these workers were getting promotions and raises left and right. Now they are hanging onto their jobs for dear life, spooked by high-profile layoff announcements, the rise of artificial intelligence and an unforgiving job market for the unemployed.

Americans with bachelor's degrees or higher put the average probability of losing their jobs in the next year at 15%, up from 11% three years ago, according to November data from the Federal Reserve Bank of New York. Workers in this group now think losing a job is more likely than those with less education do, a striking reversal from the past.

They also are growing more pessimistic about their ability to find a new job if they do get laid off. In that same survey, college-educated workers said they have an average 47% chance of finding a job in the next three months if they lost their job today, down from 60% three years ago.