Jul 9, 2026
With college tuition creeping past the $100,000 mark and AI automation shaking up major firms across industries, it’s increasingly hard for some Americans to justify what has historically been a requisite step on the path to professional success: a college degree.
Fears that new technology will gut half of the nation’s white-collar workforce and 20% of the job market in total loom as figureheads (even those in tech itself) trumpet the glories of getting into the trades, which seem, strangely enough, the most guaranteed roles amid the overzealous data-center buildout race.
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Adding to this existential turmoil, recent graduates in some sectors are earning less than previous cohorts if they can even find a job at all. What’s more, new data shows nearly half of those lucky enough to be gainfully employed after years of higher education are working gigs that don’t even require their (or any) degree.
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A tidal wave of unemployment and underemployment among recent grads
The survey, which comes from the Federal Reserve Bank of New York, outlines how 22-to 27-year-olds who are fresh out of university are facing their own recession, with 5.6% unemployed as of March 2026 (compared to 4.3% nationally). This is worse than how the same demographic fared during both the early 1990s recession and the dot-com financial crisis.
What’s even more concerning is the staggering 41.5% of this group that are now considered “underemployed,” or working jobs that don’t necessitate at least a bachelor’s diploma.
It’s not all that surprising given that entry-level jobs are proving to be the most targeted in tech-related cuts, with one survey indicating that 43% of CEOs intend to slash a swath of junior positions within two years — a significant increase from the 17% who said the same last year, when young professionals were already facing a “noticeably deteriorated” labor market.
An Oxford Economics study from that year, titled Educated But Unemployed: A Rising Reality For College Grads, blamed a glut of students in the now precarious computer-science sector alongside slowing rates of hiring in that area — just one example of a broader “mismatch between an oversupply of recent graduates in fields where business demand has waned,” especially in professional, scientific and technical services.
The same research found 85% of the post-2023 rise in the unemployment rate overall is concentrated in “new market entrants who can’t find work,” especially those who hold a bachelor’s or higher (versus those of the same age with less education). This latter point is a reverse of the usual trend of employment rates remaining most stable among more educated groups, especially during economic slumps.
Some experts point to the concept of “elite overproduction,” or the nation’s propensity to churn out educated work-ready citizens as career opportunities remain flat or decline.
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Economic impacts could extend for years to come
Young underemployed individuals face lower earnings and growth potential, both in the near-term and throughout their careers, according to a New York Times analysis.
The prevalence of remote work post-COVID also poses difficulties to training junior staff, which disincentivizes hiring fresh grads.
As Oxford Economics says, the combination of these trends run the risk of recent grads “becoming discouraged with labor market prospects and taking themselves out of the labor force entirely.” What seems to bolster this is the recent job numbers, which showed America’s workforce plunging by a shocking 720,000 in June alone as discouraged workers gave up on job hunting.
“Not only would this be suboptimal for the workers, but the economy as well; decreases to labor supply lowers the potential output of the economy,” their report says, adding that “while these workers only account for around 5% of the workforce, they have played an oversize role in pushing the national unemployment higher.”
While some new degree-holders may be resorting to gig work, gaining a foothold in a field they may not have expected or taking a position they are over-qualified for, the present landscape is making the decision of what to pursue a degree in — and whether to at all — more painstaking than perhaps ever.
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Becky Robertson is a senior staff reporter at Moneywise and a lifelong writer. Along with more than a decade covering news at outlets like blogTO and Quill & Quire, she's attended writing residencies around the world. With 33 countries visited, she finds travel to be among her greatest inspirations.
