New U.S. college grads now have higher unemployment than the average worker
4 hours ago
- #entry-level jobs
- #labor market trends
- #college graduate unemployment
- Historically, new college graduates had lower unemployment rates than the average worker, but this advantage has reversed since early 2019, resulting in the widest gap on record.
- The shift began before the rise of generative AI and the COVID-19 pandemic, indicating a slow structural drift rather than a sudden shock.
- Recent graduates now face higher unemployment (5.6% in early 2026) compared to all workers (4.2%), despite overall low unemployment levels.
- Among employed new graduates, about 41% are underemployed, working in jobs that do not require a degree.
- Debates on causes include remote work (cited by the New York Fed as contributing to 64% of the rise) and AI exposure, with both potentially impacting entry-level positions.
- Computer science graduates are particularly affected, with high unemployment rates following a surge in degrees and shrinking job openings.
- The issue is concentrated at the entry level; older degree-holders maintain low unemployment (2.8% in April 2026), and a degree still offers a better return than no degree.
- The Economic Policy Institute suggests a mixed picture, with the college wage premium flat but new graduates not faring worse than non-degree peers.