SPOTLIGHT: College graduates enter an uncertain job market
April 2025
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College graduations are set to take place across the U.S. in the coming days and weeks, and members of the class of 2025 will enter a labor market that is increasingly uncertain.
With job growth occurring "disproportionately" in "just a handful of sectors," experts say new graduates will face a challenging start to their careers.
According to Indeed Hiring Lab, internships "typically see a sharp rise in postings at the start of spring." This year, internship postings are "starting to fall behind," a blow to new graduates who rely on internships as an "entry point" into the workforce. Entry-level full-time roles are "primarily concentrated in in-person and often lower-paying sectors" like food service, driving and sanitation.
Overall, the current U.S. labor market is in a "low hiring, low firing" mode -- something that experts say "has made it harder for younger workers to find employment."
In March, the jobless rate for workers ages 20 to 24 was 7.5%, “up 2 percentage points from a low in April 2023.”
NACE Salary Survey for 2025 College Graduates via NACE, 2025
April 2025 US Labor Market Update: New Degree, New Uncertainty via Indeed Hiring Lab, April 2025
Recent graduates report "scrolling through job openings on LinkedIn" and applying to hundreds of jobs, often to no avail.
The Federal Reserve Bank of New York recently noted the "widest unemployment gap between new graduates and experienced degree holders since the 1990s."
Experts say that "graduating college no longer gives you a leg up" the way it once might have, and that “skill requirements for entry-level roles are higher today than a decade ago.”
Younger workers are bearing the brunt of a largely frozen labor market."
'College Degrees Aren’t Landing New Graduates the Jobs They Want: What’s Going On?', via Inc., January 2025
'Degree in hand, jobs out of reach: Why recent grads are struggling in a competitive market', via CNN, January 2025
'Some College Graduates Are Taking Lower-Paying Jobs' via American Enterprise Institute, December 2024
55% of recent college graduates say college "didn’t prepare them at all for their job," according to a recent survey by Hult International Business School.
77% of recent graduates "say they learned more in their first six months on the job than in their entire four years of college," according to the Hult survey.
58% of hiring managers said "people fresh out of college weren’t prepared for work," according to a survey by Intelligent.
A basic mismatch between the workplace and degree programs may be at the root, with employers not finding skills they need among the pool of new graduates."
'Traditional degrees hinder graduates at work' via Hult, January 2025
'Recent college grads are not ready for work — and HR leaders are fed up' via Worklife.news, January 2025
Overemployment is growing across the U.S. as millions of college-educated workers are now "taking on multiple jobs."
In February 2025, "roughly 8.9 million workers held multiple jobs," a record high "not seen since April 2009, during the Great Recession."
According to the Federal Reserve, "roughly half of Americans holding multiple jobs" in 2024 "have a college degree."
According to the Fed's analysis of "overemployed workers," the "share of multiple jobholders with a college degree increased to 50.2% in 2024, up from 50.0% in 2023, and up from 45.1% in 2019.
Underemployment is also an issue. According to a Burning Glass Institute report, 52% of college graduates “are actually underemployed a year after leaving college, meaning they’re working jobs that don’t typically require a college education.”
'More Americans with college degrees are working multiple jobs, Fed report finds' via CNBC, March 2025
'Beyond the 9 to 5: Decoding the Overemployment Trend' via St. Louis Fed, March 2025
‘Talent Disrupted: College Graduates, Underemployment, and the Way Forward’ via Burning Glass Institute, February 2024
AI adoption has surged, and employers are increasingly "rolling out AI tools" that may "be capable of the kind of work a low-level staff member would traditionally have been asked to do."
Experts say "many entry-level roles involve the kind of low-stakes assignments that generative AI is best at."
In many fields, entry-level roles include a significant amount of "grunt work" that is considered a "rite of passage." AI happens to be "increasingly capable" of doing that kind of work quite well all by itself.
'How AI Could Break the Career Ladder' via Bloomberg, November 2024
'Gen Z’s Job Recession Needs Urgent Attention' via Bloomberg, March 2025
'Gen Z says AI has made their college degrees irrelevant' via CIO Dive, April 2025
'Report: 51% of Gen Z Views Their College Degree as a Waste of Money' via Indeed, April 2025
Experts say the “consequences of graduating in a recession” can be “severe and long-lasting," but that candidates graduating with a bachelor's degree can "avoid entering the labor market by continuing their education."
Grad school interest and attendance surged during the 2008 financial crisis and – according to a recent Bloomberg report – there are "early signs suggest applications to grad school will be up this year."
Grad school admissions consultants say there has been a recent "surge in interest in grad school" -- something they “attribute to economic uncertainty and a bleak job market.”
Experts say opting for grad school as a way of avoiding a tough labor market comes with its own risks. Grad school loans can have higher interest rates, and “tuition at law and business schools can easily result in more than six figures of loan debt.”
The number one influencer of students thinking about grad school is either an economic downturn or economic uncertainty. Students think that will be a good relaunch when the job market picks up."
'Fearing Recession, Young People Are Heading to Grad School' via Bloomberg, April 2025
'Escaping into a master's degree in times of crisis? Master's degree applications and enrolment over the business cycle' via Economics of Education Review, June 2023
51% of Gen Z respondents to a recent survey consider their college degree a "waste of money," according to a new Indeed poll. (20% of Baby Boomers and 41% of Millennials agree.)
The "college wage premium" has "plateaued" in recent years, just as "college has become dramatically more expensive."
52% of respondents to Indeed's recent survey "reported graduating with student debt," with 38% saying "their student debt hindered their professional growth more than their degree helped."
According to a 2024 Pew Research Center survey, just 22% of Americans "say the cost of getting a four-year college degree today is worth it even if someone has to take out loans," while 47% "say the cost is worth it only if someone doesn’t have to take out loans."
'Is College Worth It?' via Pew Research Center, May 2024
'Why US Men Think College Isn’t Worth It Anymore' via Bloomberg, April 2025
Colleges and universities that offer "real" work experience are becoming more popular.
Northeastern University has long offered a "cooperative education (co-op) model" where students obtain both "real-world work experience" and academics. Drexel University offers a similar program.
The University of Vermont “plans to launch an undergraduate co-op program in fall 2025.”
'Degree in hand, jobs out of reach: Why recent grads are struggling in a competitive market' via CNN, January 2025
'How Northeastern's Co Op Program Grew with the University' via Huntington News, January 2025
