Finding a job is harder for new college graduates than for most workers. Since early 2021, their unemployment rate has been higher than the national average. This is a big shift – historically, recent grads have had an easier time finding work.
Several factors are making it tough for recent grads:
- Fewer job openings: Companies are hiring less overall, and there are fewer entry-level opportunities.
- Increased competition: More applicants are vying for the same jobs.
- Industry slowdowns: Hiring cutbacks in tech, finance, and consulting are especially hurting recent grads.
This slow start could have lasting effects:
- Lower earnings: Some grads may take lower-paying jobs outside their field.
- Stuck in the wrong job: Many who don’t land a college-level job initially might end up in a job they’re overqualified for long-term.
- Long-term earnings impact: Research suggests a challenging job market can negatively affect young adults’ earnings for a decade or more.
While the overall economy is still adding jobs, the hiring frenzy of the past few years has cooled. This “new normal” favors those already employed but makes it harder for new grads to break in.
Finding work is especially difficult for those seeking remote jobs.
Job seekers’ confidence is down. Americans are less optimistic about their chances of finding a new job quickly compared to pre-pandemic times.
Recent grads are feeling the brunt of the slowdown. While experienced workers are finding new jobs at pre-pandemic rates, new entrants to the workforce are struggling.
The long-term outlook for recent grads is uncertain.
- College grads still have a lower unemployment rate and higher earnings than non-grads overall.
- Financial recovery is possible. Millennials hit by the Great Recession early in their careers are now doing better financially.
The bigger question in the future might be the value of a college degree.
- Soaring college costs burden graduates with debt that can hinder saving.
- More companies are open to hiring non-grads.
- The wage premium for a college degree has been declining.
While most new grads probably aren’t regretting college yet, a prolonged tough job market could make them question its value.
Disclaimer: This article is for informational purposes only and should not be taken as financial advice. While the job market may be challenging for recent college graduates, a college degree can still offer long-term benefits. Readers are encouraged to do their own research and consider their individual circumstances before making decisions about their education and career path.
