You have probably read about the difficulty recent grads are having in securing employment. This unfortunate reality is illustrated in the following graphic:
Historically, the unemployment rate for recent grads was below that of the general population as shown by the blue line consistently falling below the black one. However, that changed around 2019 with recent grads currently experiencing an unemployment rate of 5.8% as compared to overall unemployment of 4%. The job market is even challenging for those earning MBA degrees from prestigious schools. For example, the percentage of students without a job three months after graduation grew from 4% in 2021 to 15% in 2024 at both Harvard and MIT.
There are a number of possible explanations for the difficulties young adults face. First, 37.5% of Americans now have a college degree versus 25% in 2000. While a more educated work force is certainly a benefit for the country as a whole, the sheer number of degree holders may diminish or remove the leg-up in the job market that grads formerly enjoyed. Second, a survey by online magazine Intelligent found that 58% of hiring managers state that recent college grads are unprepared for the workforce. Even entry level jobs often require practical skills and industry knowledge that are not available to those without prior work experience in the field. Some employers also indicate that students are short on the social skills that are a crucial part of the interview process. They cite inappropriate dress, poor preparation, failure to look directly into the eyes of the interviewer, and unrealistic salary expectations.
The more intriguing possible explanation is that we may be seeing the initial impact on the job market of artificial intelligence. As just one example, newly employed grads in finance and accounting are typically assigned tasks such as gathering and analyzing data and preparing presentations. Both of these are increasingly being automated. Similar transitions are occurring in other fields. In response to these challenges, a number of educational institutions are implementing co-op models that integrate real work experience with academics. These programs also typically provide coaching on social and interviewing skills as well as opportunities for professional networking.