AI Shakes U.S. College Graduates as Non-Graduate Youth Enjoy 20-Year Employment Boom

The U.S. labor market is producing an unusual divide: young people without college degrees are enjoying one of their strongest employment periods in two decades, while new graduates face a difficult search for entry-level work.

An analysis by the Burning Glass Institute, reported by The Wall Street Journal, found that unemployment among Americans aged 22 to 34 without college degrees had fallen close to its lowest level in 20 years. Conditions for college graduates of the same age were close to their worst in that period, apart from the disruptions after the COVID-19 pandemic and the slow recovery following the 2007-2009 financial crisis.

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People with bachelor’s degrees are rapidly increasing in supply, while people without them are rapidly decreasing. I don’t think this is a temporary phenomenon.

The shift reflects changes in labor supply and demand. Skilled workers in construction and manufacturing are retiring as they age, while employers lack enough new workers to replace them. Lower immigration has added to the labor shortage. At the same time, the number of Americans with bachelor’s degrees has reached a record level, and companies are increasingly using AI for some of the basic work once assigned to new graduates.

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Students who have done everything they were taught to do are still struggling.

“People with bachelor’s degrees are rapidly increasing in supply, while people without them are rapidly decreasing,” said Gad Levanon, chief economist at the Burning Glass Institute. “I don’t think this is a temporary phenomenon.” Unemployment has been especially low in jobs that require face-to-face or on-site work, including construction, manufacturing, security, nursing and care, restaurants, and retail. Food services and drinking places added 59,000 jobs in August, more than one-third of the 162,000 jobs added across the U.S. that month.

Zachary Blackman, who graduated from the University of Cincinnati in May with degrees in international business and operations management, applied to 70 full-time jobs before graduating but received only three interview opportunities. He brought forward his plan to attend graduate school and hopes an MBA will expand his options. Levanon said graduates may improve their prospects by broadening their choice of companies or locations. Still, the data does not show that non-graduates are generally more employable. Among workers aged 25 to 54, average unemployment through July was 2.7% for college graduates, compared with 3.6% for people with some college education and 4.7% for high school graduates. The analysis measured how each group’s current unemployment compared with its own record since 2003. Future conditions remain uncertain as AI, robotics, and automation develop.

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It may be very difficult to get a job at a top company, but if you can adjust your conditions to some extent, there are more opportunities.