GoKawiilKey Takeaways Research shows that college graduates could be haunted by a weak job market in the form of reduced earnings and employment opportunities.
Unemployment for 22‑ to 27‑year‑old college grads is around 5.6 percent, noticeably higher than in recent years and unusually elevated relative to the broader workforce.
More than 40% of employed recent graduates are working in jobs that do not require a college degree, the highest share since 2020.
Today’s class of college graduates is entering one of the weakest labor markets in years, and research suggests that those early setbacks could echo through their earnings and careers for at least a decade.
According to a recent report from The New York Times, recent college graduates are stepping into the most challenging job market since the depths of the pandemic. An analysis from the Federal Reserve Bank of New York shows that unemployment among 22- to 27-year-old college graduates has increased over the past three years, reaching 5.6% in the first quarter of the year.
That’s above the 4.2% overall jobless rate. College graduates usually enjoy lower unemployment than the broader workforce, so the current gap is a sign that entry-level hiring has weakened disproportionately.
At the same time, underemployment has surged. More than 40% of employed recent graduates are in roles that do not typically require a college degree, the highest level since 2020, per the Federal Reserve Bank of New York.
“The overall labor market is not in a recession right now,” Larry Katz, a labor economist at Harvard, told the Times. “But it’s clearly feeling like a recession for young college graduates entering the labor market.”
Economists told the Times that the tough job market means graduates are likely to earn less and face more challenges in advancing their careers. Research has repeatedly found that the year a worker leaves college, and the state of the economy at that moment, can shape how much they earn in the long term.
One study examined the effects of a weak job market on wages
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