College Graduates Facing Harshest Labor Market Since 2012/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Recent college graduates aged 22–27 are enduring the toughest job market in over a decade, with unemployment at 5.8%, the highest since 2012 outside the pandemic. Hiring has slowed across white-collar fields due to economic uncertainty, interest-rate hikes, and the rise of AI. While struggling for entry-level roles, many grads are opting for further education or internships to bridge the gap.
Graduate Job Struggles + Quick Looks
- Young-degree unemployment: Graduates aged 22–27 face a 5.8% unemployment rate—well above the 4.2% national average.
- Economic headwinds: Rising tariffs, Federal Reserve rate hikes, and uncertainty have employers pausing on hiring.
- Tech and AI disruption: Entry-level jobs in IT, finance, law, and STEM have contracted as automation advances.
- Personal stories reveal impact: Graduates like Zahid and Lindo report hundreds of applications rejected with little response.
- Silver lining: Economists still say degrees boost lifetime earnings and employment security.
College Graduates Facing Harshest Labor Market Since 2012
Deep Look
YOUNG GRADS STUCK IN SLUMP
Maryland native Palwasha Zahid, 25, completed her master’s in data analysis near Silicon Valley last December. She now spends her days applying to tech giants like Google and Nvidia—and facing silence.
“It stings a little bit,” Zahid admits. “I never imagined it would be this difficult just to get a foot in the door.”
Her frustration is echoed nationwide. Recent college grads are contending with the worst job market since 2012, excluding the COVID‐19 shock. The unemployment rate for degree holders aged 22 to 27 stands at 5.8%, sharply higher than the broader workforce average of 4.2%.
ECONOMIC UNCERTAINTY HALTS HIRING
Economists suggest employers are hesitant to fill entry-level positions amid macroeconomic unpredictability. “Young people are bearing the brunt of a lot of economic uncertainty,” says Brad Hersbein of the Upjohn Institute. “The people that you often are most hesitant in hiring when economic conditions are uncertain are entry-level positions.”
Tariff policy, discussed in the Biden and Trump-era trade debates, and rapid interest-rate hikes by the Federal Reserve to combat inflation have squeezed employer budgets. Companies are hiring selectively—focusing on sectors like healthcare, government, hospitality—while white-collar fields struggle.
TECH HIRES SHRINK AMID ‘NO‑HIRE, NO‑FIRE’
Though layoffs remain low, new hiring rates have declined to 2014 levels—the year unemployment was much higher at 6.2%. Economists describe today’s landscape as a “no‑hire, no‑fire” economy with stagnant entry-level opportunity.
In computer science and math jobs, the data is stark: employment for college grads aged 28+ ticked up slightly (+0.8%) since 2022, whereas for those 22–27 it dropped 8%, notes Oxford Economics’ Matthew Martin.
GRAD STORIES: RESILIENCE & RESUMES
Business graduate Lexie Lindo, 23, from Clark Atlanta University, applied to over 100 jobs with a 3.8 GPA and multiple internships—yet heard “nothing back.” “Nobody was taking interviews or responding,” she recalls.
“My resume is full, there’s no gaps… It’s just, ‘OK, so what else are you looking for?’” Now pursuing a master’s and interning in Austin, she remains optimistic.
Palwasha Zahid also resists turning pessimistic. Encouraged by her network and driven by her husband’s success in IT, she keeps moving forward:
“I will put [my diploma] up when I actually get a job, confirming that it was worth it all.”
IS AI REALLY TO BLAME?
The role of artificial intelligence in reshaping entry-level roles remains contested. Executives like Shopify’s Tobi Lutke warn teams must justify hiring over automation. Amazon’s Andy Jassy predicts an AI-driven reduction in corporate staffing.
Yet LinkedIn’s Kory Kantenga says broad labor data doesn’t show AI hitting younger workers especially hard. He credits higher interest rates for tech layoffs, warning pandemic-era tech expansions created a hiring bubble.
LONG‑TERM DEGREE BENEFITS ENDURE
Despite short-term challenges, most economists maintain college remains a sound long-term investment. While too many Americans now hold degrees to make higher education standout, degrees still yield higher lifetime pay and lower lifelong unemployment. Today’s graduates may have to wait longer to land that first role—but the rewards can last a lifetime.
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