College graduates now represent more than 30 per cent of America’s long-term unemployed population, marking the highest proportion in two decades and a dramatic reversal from historical employment patterns. Government data from the Central Population Survey, as reported by The New York Times, reveals that the share of long-term unemployed Americans who are college graduates has surged from approximately 20 per cent around 2010 to above 30 per cent today.This troubling shift represents a fundamental change in the composition of America’s persistently jobless population, with educated workers increasingly comprising the ranks of those unable to secure employment for extended periods. Whilst long-term unemployment amongst secondary school graduates, those with some college education, and school dropouts has generally declined or fluctuated downward, the rate for college-educated workers has moved in the opposite direction, according to The New York Times analysis.Long-term unemployment trends reveal educational paradoxThe gap between college graduates and other education groups in long-term unemployment has widened particularly in the past one to two years, following a brief period of improvement. This acceleration coincides with broader employment challenges facing recent graduates, with unemployment rates for college graduates aged 22-27 nearing 6 per cent, above the national average of 4.2 per cent, according to Oxford Economics.
Source: Central Population Survey data analysis by The New York TimesThe Federal Reserve Bank of New York reports that unemployment amongst recent college graduates averaged 5.3 per cent in the second quarter of 2025, whilst Oxford Economics data shows that recent college graduates account for 12 per cent of the rise in national unemployment since mid-2023, despite comprising only 5 per cent of the labour force.Structural factors drive educated unemployment crisisMultiple structural forces contribute to the deteriorating employment prospects for college-educated workers. The New York Times analysis identifies technological change and automation as primary drivers, alongside President Trump’s cuts to federal workers and funding, which have disproportionately affected the college-educated workforce.The technology sector, traditionally a significant employer of graduates, faces particular disruption. CBS News, citing Oxford Economics research, reported that artificial intelligence has begun replacing lower-level jobs in technology sectors, especially affecting recent graduates without significant experience. The research identifies unemployment amongst recent graduates as being driven largely by a mismatch in tech sector hiring and AI replacing lower-level computer science positions.Economic uncertainty and reduced tech hiring compound these challenges, contributing to prolonged unemployment periods for graduates seeking technology positions, according to the CBS News report.Gender and demographic disparities emergeEmployment outcomes vary significantly across demographic groups, with pronounced gender differences in graduate unemployment. Analysis of US Current Population Survey data by the Financial Times reveals that unemployment amongst college-educated American women stands at around 4 per cent, whilst college-educated men face rates of approximately 7 per cent.The disparity partly reflects growth in healthcare sectors, which women are more likely to pursue. The US Bureau of Labour Statistics projects healthcare occupations will grow much faster than the rate for all occupations over the next decade, creating approximately 1.9 million annual openings.“Health care is a classic recession-resistant industry because medical care is always in demand,” career expert Priya Rathod told Fortune, as quoted by the publication.Underemployment compounds graduate employment woesBeyond unemployment, widespread underemployment affects college graduates who do secure work. The Federal Reserve Bank of St. Louis reports that more than half of recent graduates work in positions that do not require a college degree within one year of graduating. The Federal Reserve Bank of New York data shows that the underemployment rate for graduates—working in jobs where 50 per cent or more employees do not require a degree—stands at just over 41 per cent.Employment outcomes by major field of study
Source: Federal Reserve Bank of New York, “The Labour Market for Recent College Graduates”The Federal Reserve Bank of St. Louis data indicates that underemployed graduates earn only about 25 per cent more than typical secondary school graduates, compared to 88 per cent more for adequately employed graduates. Perhaps more concerning, 45 per cent of college graduates remain underemployed even 10 years after graduation.Labour market fundamentals shift away from degree requirementsEmployers increasingly drop degree requirements for entry-level roles, fundamentally altering traditional hiring practices. Fortune magazine reported that unemployment amongst Gen Z men with college degrees roughly matches that of non-college graduates at approximately 5.5-6 per cent, marking a significant departure from historical employment patterns.This represents a dramatic shift from around 2010, when non-college-educated men experienced unemployment rates exceeding 15 per cent whilst college graduate rates remained closer to 7 per cent, according to Fortune’s analysis.Young men are simultaneously shifting away from college education towards skilled trades, with vocational school enrolments rising approximately 20 per cent since 2020. This trend suggests growing recognition that traditional higher education may no longer provide adequate returns on investment.Economic implications for higher education sectorThe surge in long-term unemployment amongst college graduates carries profound implications for the higher education sector’s value proposition. The New York Times analysis notes that whilst there are simply more college graduates today than 10 years ago, employers appear to have diminishing need for college-educated workers.Oxford Economics identifies structural shifts in tech hiring and artificial intelligence impact as key factors driving higher graduate unemployment rates. The research suggests these changes may represent permanent rather than cyclical adjustments to labour market dynamics.Despite challenging employment conditions, labour force participation amongst recent graduates remains steady, according to Oxford Economics. However, underemployment rates for graduates also remain steady, suggesting reluctance amongst job seekers to modify their search criteria despite poor market conditions.The persistence of both unemployment and underemployment amongst college graduates, combined with the historical shift in long-term unemployment composition, indicates fundamental changes in how the labour market values educational credentials relative to practical skills and experience.
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