Two charts this week, and together they tell a story about our younger generations.
The first chart shows that new business applications are still strong; Americans keep forming companies at a healthy clip. But look at the red line: applications from businesses with a “high propensity to hire” are rolling over. The right-hand panel is instructive. Across millions of small businesses, payroll spend has gone flat-to-negative while spending on tech services (AI very much included) is accelerating toward 15% year-over-year. New firms are being born. They’re just not being born hungry for employees.
That’s a quiet revolution, and it lands hardest on the young. The entry-level job, the mailroom, the analyst seat, the “we’ll train you” hire, has always been the bottom rung of the career ladder. It’s also, in large part, exactly the work a capable model now does for the price of a subscription. When a two-person startup can rent the output of a junior employee instead of hiring one, the rung disappears. You can’t climb a ladder that’s missing its first step.
Now the college question, which everyone loves to argue and nobody wants to answer honestly. The New York Fed still pegs the return on a bachelor’s degree around 12.5%, so on average the diploma still pays. But averages hide everything interesting. Engineering grads clear roughly $949,000 in extra lifetime earnings; nearly a quarter of programs post negative returns. Small wonder confidence in higher education has slid to 38% from 57% a decade ago, and that 44% of graduates say their own degree didn’t pay off. When 64% say they wouldn’t take the loan again, that isn’t anti-intellectualism. It’s a market repricing a product whose implied guarantee, the good first job, just got automated.
Younger folks are responding rationally. In one survey, 39% ranked trade school as the best return on investment, against just 25% for a four-year degree. A welder’s torch, a nursing license, an HVAC van: none of that gets vacuumed up by a chatbot, and none of it arrives with $30,000 of debt attached. Meanwhile, the second chart shows 43% of Gen Z considering starting a business in 2026, more than any generation before them, with another third eyeing gig or freelance work. Call it intent rather than outcome (most won’t follow through), but the direction is unmistakable. If the ladder won’t hire you, you build your own.
Here’s the twist that ties both charts together: AI is what makes the exit ramp passable. Sixty percent of new business owners used AI to launch in 2025, double the rate just two years earlier. The same tool that ate the entry-level job is also the co-founder, the marketing department, and the back office for a twenty-three-year-old with a laptop and no employees. The technology closing the front door is quietly holding the side door open.
So which is it: crisis or renaissance? Maybe both, and the answer turns on whether a young person can get to the tools before the tools get to their first paycheck. The generation that learns to direct AI will do just fine. The one waiting around to be hired and trained may be waiting a long while. That’s the provocation worth sitting with, and for those of us thinking about who funds the next few decades of retirements, it’s not a small one. 🤷🏼♂️
Sources: a16z, Charts of the Week | Mauldin Economics, Is College Worth It? | Credible, Is College Worth It? Survey