By the numbers, the American job market doesn’t look too bad right now. Unemployment sits at a comfortable 4 percent, wages are mostly stable, and the economy isn’t in free fall. But for one particular group—college graduates between the ages of 22 and 27—those broad-stroke stats feel about as relevant as a landline.
A decade ago, the overall unemployment rate for college graduates was just 2.7 percent—about the same as it is today (2.5 percent). But that statistic masks a growing disparity.
In July 2015, only 4.3 percent of recent college graduates—those between ages 22 and 27—were unemployed. That rate has now jumped to 5.8 percent, a 35 percent increase over the last 10 years. The widening gap between established degree-holders and newer graduates underscores how much harder it’s become for young adults to break into the workforce, even with a diploma in hand.
“Young people are bearing the brunt of a lot of economic uncertainty,” said Brad Hershbein, senior economist at the W.E. Upjohn Institute. He added that the gap between recent graduate unemployment and the overall unemployment rate “hasn’t been this large in over 30 years.”
The college graduates of the 2020s were told that if they did everything right—went to school, earned a degree, built a résumé—the world would be waiting for them. Instead, they’re graduating into one of the worst job markets for young people in more than a decade. And the reasons why are more complicated than a simple hiring freeze.
Several forces are colliding to make the current labor market especially brutal for young workers. Start with the post-pandemic slowdown: after two years of hiring booms to make up for COVID-era losses, companies are pumping the brakes again, wary of inflation, interest rate hikes and whispers of recession. Overall job postings are down, but entry-level ones? They’ve fallen off a cliff. Some estimates show a 43 percent drop in entry-level listings since 2022.
“Employers are being extremely selective,” said labor economist Aaron Sojourner. “When things get tight, the easiest place to cut back is entry-level roles. You don’t have to lay anyone off—you just stop hiring new people.”
Then there’s the AI elephant in the room. ChatGPT and its cousins are quietly reshaping the entry-level job landscape. Automation has started to swallow the kinds of jobs that recent grads used to land first: data entry, customer service, coding, even paralegal work. And companies that aren’t replacing people with AI are often using it to filter applications before a human even sees them.
“There’s a growing concern that the entire early-career ladder is being restructured or removed,” said Sojourner. “When you eliminate the bottom rungs, it’s a lot harder for anyone to climb.”
Credential inflation isn’t helping either. In many industries, a bachelor’s degree is now the bare minimum—even for jobs that don’t necessarily require one. And with so many grads flooding the market, the value of a degree has become less about qualification and more about gatekeeping. Everyone’s overqualified, and no one’s getting callbacks.
The economic signals are flashing red for Gen Z grads. According to the New York Federal Reserve, underemployment—a term for people working jobs that don’t require a college degree—is now over 41.2 percent for recent graduates. That means nearly half of new degree-holders are waiting tables, stocking shelves or driving delivery routes.
And it’s not just what jobs they’re getting—it’s whether they’re getting any at all. In Philadelphia, Axios reported that recent grads are being boxed out of the job market entirely, struggling to land interviews even after sending out hundreds of applications.
“It’s like screaming into the void,” said one 23-year-old Temple University graduate who applied for 112 jobs before landing a part-time retail gig. “I did everything right, and I still ended up here.”
If this all sounds familiar, it’s because we’ve been here before. In the wake of the Great Recession, the unemployment rate for new grads hovered around 9 percent for years, with lasting impacts on wages and career development. Studies show that people who graduate into recessions tend to earn less for decades—and are more likely to face job instability later in life.
Then came the pandemic, which sent the job market into another tailspin. But unlike the relatively short-lived COVID crash, today’s downturn is slower, sneakier. There’s no obvious catastrophe to blame, which makes it harder to address—and harder for young workers to explain when their parents ask why they’re still living at home.
What’s especially unsettling about this moment is that it’s not just about jobs—it’s about trust. For decades, the college degree was sold as a golden ticket. Yes, it would cost a fortune. Yes, you’d rack up debt. But the payoff? A stable, well-paying job with upward mobility.
That equation is breaking down. Recent research shows that nearly half of Gen Z men are skipping college altogether, turning instead to trades like plumbing and electrical work—fields that offer faster payoffs, less debt and, crucially, jobs. For the rest, especially those graduating with liberal arts or general business degrees, the return on investment for higher education is looking shakier by the day.
“We need to rethink how we prepare people for the workforce,” said Nicole Smith, chief economist at Georgetown University’s Center on Education and the Workforce, in a recent panel discussion. “It’s not enough to say ‘get a degree.’ We need better pipelines, better career services and better alignment between education and employment.”
For now, recent grads are being told to do what young workers have always done during downturns: wait it out. Pick up gig work. Get creative. Take the job you can get, even if it’s not the job you trained for.
But for many, that feels like yet another broken promise.
“This generation isn’t lazy or entitled,” Smith said. “They’re navigating a fundamentally different economy than their parents did. And unless we address that reality, we’re going to lose a lot of talent to discouragement, burnout or disillusionment.”
That’s not just bad news for young workers. It’s bad news for all of us. Because when an entire generation starts their careers underwater, it drags down everything else—homebuying, family formation, innovation and long-term economic growth.
If the post-pandemic era was supposed to be about rebuilding, we’re not doing a great job so far. The class of 2025 deserves better than a soft landing that’s already collapsed beneath them. They deserve a system that sees them not as a line item to cut, but as the future workforce they actually are.
Until then, they’ll keep hitting “submit application” and hoping someone finally hits “reply.”
