College Graduates Confront Most Challenging Job Market in Over a Decade as Hiring Rates Decline

In a small town near Silicon Valley, 25-year-old Palwasha Zahid just completed her master’s in data analysis. She’s surrounded by tech giants like Google and Apple but struggles to find a job. “It stings a little bit,” she admits, “I never thought it would be this tough.”

This sentiment echoes for many recent graduates. The job market for young degree holders is challenging. Currently, their unemployment rate has reached its highest point in over a decade, with 5.8% without jobs in March, according to the New York Fed. This is a stark contrast to the general unemployment rate of 4.2%.

Economists, like Brad Hersbein from the Upjohn Institute, believe this trend shows that businesses are hesitant to hire due to ongoing economic uncertainty. Factors like changing policies and inflation play a significant role in these decisions. “Young people are bearing the brunt of a lot of economic uncertainty,” he explains.

Another issue is the rise of artificial intelligence, which may be reducing entry-level opportunities in industries like IT and finance. Data shows that employment for younger graduates in these fields dropped 8% since 2022, while jobs for those over 28 grew slightly.

This shift raises questions about the value of a college degree. As of now, about 45% of workers have a four-year degree, up from just 26% in 1992. Murat Tasci from JPMorgan highlights that having a degree isn’t the strong advantage it once was. Yet, many economists argue that time and again, college graduates tend to earn more and face lower unemployment throughout their lives.

Despite challenges, some young graduates are adapting. Lexie Lindo, 23, applied for over 100 jobs after graduating with high marks but received few responses. Now, she’s pursuing a master’s and hopes her upcoming internship at a Fortune 500 company will open doors. “I’m trying to stay hopeful,” she says.

The influence of tech giants and their leaders can’t be ignored. For instance, Slack’s CEO has suggested that AI might replace some roles in their workforce. Similarly, Amazon’s CEO noted that AI could lead to job reductions in the coming years. Yet, some experts, like Kory Kantenga from LinkedIn, believe it’s early to blame AI for job losses. He notes, “We don’t see broad evidence that AI impacts young workers more than older ones.”

Many industries are feeling the pinch, but the tech sector, in particular, is adjusting after rapid expansion during the pandemic. Cory Stahle from Indeed mentions that job postings for software developers have plummeted by 40% since their peak.

For Zahid, the journey has been tough. “I wish I could see my degree hanging up as a sign of success, but I want it to mean something first,” she reflects.

Overall, while young graduates face a tough job market, many experts believe there are routes to success ahead. Keeping adapted skills and staying resilient may be the keys to navigating this uncertain landscape.

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Andrew Jassy, Federal Reserve System, Labor, Oxford, Colleges and universities, Jobs and careers, Information technology, Engineering, Texas, Dallas, Austin, Artificial intelligence, General news, U.S. news, Apple, Inc., Alphabet, Inc., Cory Stahle, Brad Hersbein, Education, Tobi Lutke, JPMorgan Chase Co., NVIDIA Corp., Lexie Lindo, Matthew Martin, Business, Kory Kantenga, Coronavirus, Amazon.com, Inc., Pandemics, Economic indicators, Economic policy, United States government, Government policy, Economy, U.S. News