Recent graduates in the United States are facing one of the most challenging job markets in over a decade due to factors such as the increasing number of college graduates, the impact of artificial intelligence technology, industry contraction, and a “low-hiring environment,” making it harder for new professionals to secure their first full-time job.
According to a report by CNBC on October 3, a bachelor’s degree, once seen as a stepping stone to white-collar professions, no longer guarantees recent graduates a smooth transition into full-time employment. Data shows that the unemployment rate for individuals aged 20-24 with a college degree has reached a nine-year high, narrowing the gap with those with only a high school education to the lowest in over twenty years.
Gad Levanon, Chief Economist at labor market think tank Burning Glass Institute, believes that part of the issue stems from the increasing number of young Americans obtaining four-year degrees. The demand for talent with this level of education is not keeping pace, indicating that the current situation may not improve quickly.
He added that this could lead to a decline in college enrollment as young people realize that higher education is no longer the career development pathway it used to be.
Robert Newry, co-founder of the Arctic Shore Alliance, suggests that simply reducing early career recruitment is not the solution and advocates for universities to teach future skills to better prepare graduates for employment opportunities.
The rise of artificial intelligence has also sparked concerns about entry-level knowledge workers being replaced by automation.
A study released by Stanford University in August revealed a 13% decline in employment rates among American workers aged 22-25 in industries most affected by artificial intelligence since 2022. Executives from companies like Walmart and Accenture have acknowledged that this technology will thoroughly reshape their workforce structures.
Data from the University of Michigan shows that the likelihood of unemployment among the 18-34 age group in the next five years skyrocketed to its highest level since 2013 in May of this year.
However, a “real phenomenon” indicates that not all recent graduates are experiencing the same degree of change.
On job search websites, the number of software development positions is around 66% of pre-COVID levels. On the other hand, recruitment for nursing positions has increased by about 16% during the same period.
In the tech industry, the decline in entry-level recruitment is especially pronounced. According to data from venture capital firm SignalFire, the number of inexperienced employees recruited by major tech companies decreased by over 50% from 2019 to 2024. In startups, this number dropped by over 47%.
Regarding the issue of graduates and entry-level jobs being replaced by artificial intelligence, some perspectives suggest that we are still in the early stages of the AI cycle, making it hard to predict how AI will impact entry-level jobs. Security and reliability issues are still being addressed, and the largest AI applications in major organizations are being developed as “co-pilots,” enhancing rather than replacing jobs.
Robert Newry of the Arctic Shore Alliance believes that the current state of workforce AI will not lead to a significant collapse in early careers. The biggest challenge lies in the widespread belief that there is a substantial reduction in entry-level job opportunities for graduates.
He stated, “We can’t simply cut back on early career recruitment because we will still need these skills in the future.”
Newry mentioned that he and Amazon’s Cath Possamai have reached a consensus proposing increased engagement in university education to help teach future skills, enabling graduates to better prepare and immediately create value in different ways in the future.