Singapore President Tharman Shanmugaratnam has warned that artificial intelligence is reducing demand for entry-level workers, urging governments worldwide to urgently address the growing challenges facing fresh graduates entering the labour market.
Shanmugaratnam raised the concern on Monday during the International Monetary Fund and World Bank annual meetings in Bangkok, Thailand, saying the first step into employment was becoming increasingly difficult as AI adoption reshapes hiring needs, particularly in industries most exposed to the technology.
“There is a particular problem that we have to address very soon… and that is that, the first rung in employment, your first job upon graduation, is now seeing less demand,” he said.
He added that evidence of the trend was already clear, especially in sectors where businesses were making greater use of AI to perform tasks traditionally handled by human workers.
The warning highlights growing concerns that the rapid adoption of AI could change the way companies recruit, particularly for junior positions that have traditionally provided graduates with their first opportunity to gain workplace experience.
Entry-level jobs often involve tasks such as research, data processing, document preparation, customer support and routine administrative work. As AI tools become more capable of handling some of these responsibilities, employers may need fewer workers for certain tasks or change the skills they expect from new recruits.
For graduates, the shift could make the transition from education to employment more challenging, especially if employers increasingly seek candidates who can combine technical knowledge with the ability to use AI tools effectively.
Shanmugaratnam urged governments to respond to the emerging challenge before it deepens, stressing the need to address the implications of AI for employment rather than treating technological progress as an issue confined to businesses and technology developers.
He also cautioned against allowing AI-driven disruption to create a new divide between advanced and developing economies.
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The concern is that wealthier countries and businesses with greater access to technology, investment and advanced digital infrastructure could be better positioned to benefit from AI, while developing economies risk falling behind or facing greater difficulties adapting to changes in the labour market.
Such a divide could affect employment opportunities, productivity and the ability of workers in developing countries to compete for emerging jobs.
His remarks come amid a wider debate over how governments, employers and educational institutions should prepare workers for an economy increasingly shaped by AI.
While the technology offers opportunities to improve productivity and create new types of work, concerns are growing about its effects on existing jobs and the skills workers will need to remain competitive.
For young people entering the labour market, the challenge is particularly pressing because their early work experience often provides the foundation for future career development.
A reduction in entry-level opportunities could make it harder for graduates to gain the practical experience needed to progress into more senior roles, potentially widening the gap between academic qualifications and employers’ expectations.
Shanmugaratnam’s warning places the issue of graduate employment among the pressing questions governments must confront as AI adoption accelerates across industries and economies.
About the Author
Cecilia Attah is a tech analyst with a degree from Benue State University. She covers tech news and startups at TechRegard with a focus on how technology is transforming Africa and shaping the global landscape.
