The entry-level ladder is disappearing
How the loss of entry-level jobs in the US is driving more companies to nearshore.
Hey there,
On the surface, the labor market looks healthy. Unemployment is steady at about 4 percent, and job openings are at their highest in nearly two years. But entry-level opportunities are disappearing.
Recent graduates are facing the toughest entry-level job market in years, and more companies are pausing junior hiring altogether. It seems clear that companies are choosing not to invest in early-career talent.
These same pressures are leading US companies to build teams in Latin America, and, as this week's data show, this trend is accelerating. Colombia's recent election also gave investors a reason to be optimistic.
Let's get into it.
🌐 News Shortlist
1. AI Broke the Entry-Level Job. The Damage Is Concentrated at the Bottom.
Recap: New data shows this is the hardest entry-level job market for graduates since the pandemic. Unemployment for recent college grads aged 22 to 27 is now 5.7 percent, higher than the 4.2 percent rate for all workers, and about 43 percent of new grads are underemployed. The National Association of Colleges and Employers predicts 2026 will be the worst graduate job market since 2020. About 21 percent of companies have already stopped hiring for entry-level roles because of AI, and 47 percent expect to cut these jobs entirely by 2027. Still, some white-collar fields expected to shrink due to AI have actually grown since 2022: there are 7 percent more software developers, 10 percent more radiologists, and 21 percent more paralegals.
Looking closer, AI is not wiping out all white-collar jobs. Instead, it is taking away the junior tasks that used to help young people get their start.
This difference is important because it explains a trend that is often misunderstood. Since 2022, white-collar jobs overall have increased, especially at the senior and mid-levels. The jobs disappearing are those that rely on tasks AI can now do quickly, such as first-draft research, basic coding, document review, and entry-level analysis. Employers are now asking for more experience in roles that used to help people gain it. So, the market wants candidates who already have the skills that entry-level jobs once provided.
For founders, this creates a trap that looks like a savings. Cutting junior hires lowers payroll today and removes the pipeline that produces your senior people tomorrow. The companies freezing entry-level roles are just deferring a cost-saving problem.
Advice: Do not cut your junior hiring just to save money in the short term. Figure out which early-career roles help your team build the skills you will need in a few years, and make sure to keep those positions. Companies that continue to develop talent now will have an advantage as others compete for experienced staff.
2. US Companies Are Accelerating Into Latin America. The Cheap Window Is Closing.
Recap: Over half of US companies now plan to expand their nearshoring in Latin America through 2026, building teams in Mexico, Colombia, Costa Rica, and Brazil. Investment in Mexico alone jumped over 70 percent year-over-year to about 28 billion dollars, and the Inter-American Development Bank reports that foreign investment is rising again in Mexico, Brazil, and Colombia. As the market grows, competition for talent is heating up. Developer salaries in the region are increasing by 8 to 12 percent a year in most places, and by 2026, rates are expected to be 10 to 15 percent higher than in 2025. Still, hiring in Latin America is much cheaper than in the US.
This story is the direct answer to the first one. When the US entry-level ladder breaks, experienced talent gets scarcer and more expensive at home. Latin America is where companies are rebuilding that capacity, and the numbers show they are moving fast.
There are good reasons for this shift. Latin America has strong engineering, product, and operations talent, similar time zones, and costs that are still much lower than in the US. The main thing changing now is the price. Salaries are rising by 10 to 15 percent a year because demand is outpacing supply. Companies that started building teams here two years ago secured talent before salaries jumped. Those starting now will pay more than before but less than in the future.
A common mistake is seeing Latin America only as a way to save money, not as a place to build strong teams. Companies that focus just on the lowest costs often hire poorly, lose employees within a year, and then think the region is not a good fit. The region works well, but bargain hunting does not.
Advice: If you are considering Latin America, act this year and use current salary data, not last year's. Build your team with a long-term mindset, offering real opportunities and reasons to stay, because the talent you want has choices and is aware of it.
3. Colombia's Vote Thrilled Investors. The People You Hire Will Outlast the Result.
Recap: In Colombia's first-round presidential vote on May 31, right-wing outsider Abelardo de la Espriella led with 43.7 percent, ahead of leftist senator Iván Cepeda with 40.9 percent. Since no candidate got over 50 percent, both will go to a runoff on June 21. This result surprised many, as polls had favored Cepeda. Markets reacted right away: Colombian stocks had their biggest jump in over six years, bonds rallied, and the peso strengthened as investors expect a more business-friendly approach from De la Espriella, who supports tax cuts, deregulation, and private investment. Still, analysts warn that volatility will likely continue until the runoff.
I am not Colombian and do not vote there, so these are not my personal views. Many people have asked how the election result will affect team building in the region, so here is what analysts are saying.
De la Espriella's plan is what markets prefer: tax cuts, deregulation, a focus on energy, and a smaller government, plus a respected former finance minister as his running mate. Cepeda's platform would continue the current government's policies, with greater redistribution, greater state involvement, and a continued halt to new oil projects. In the short term, investors are more positive about De la Espriella and more cautious about Cepeda, which aligns with the market's initial reaction. However, there are some concerns. De la Espriella's proposals are seen as bold but lacking detail, and his confrontational style brings its own uncertainty. Colombia's fiscal deficit is expected to widen regardless of who wins. Both candidates want lower interest rates, and investors are watching that closely.
Here is what matters for hiring: politics creates the environment, but talent determines your success. I have seen companies do great work in Colombia under both left- and right-leaning governments. The engineers, product leaders, and operators we work with in Bogotá and Medellín will keep building and adapting, no matter who wins on June 21.
Advice: Do not base your hiring in Colombia on the election timeline. Strong teams have succeeded there under every recent government. Start building relationships now, and let your team, not the news, shape your results.
That is it for this week.
Entry-level jobs are disappearing in the US, and companies that cut them are saving money now but risking a shortage of senior talent later. This shortage is one reason US companies are moving into Latin America, where there is plenty of talent and real cost advantages, although the best deals are fading quickly. Colombia's recent election gave investors something to celebrate, but the real key to success there remains the same: your team.
The trends that shift first are the ones to watch right now. That is the purpose of this newsletter, and it is what we help clients understand every week at lupahire.com.
Until next time,
Joseph Burns
CEO & Founder, Lupa