My recent post, Plastics, focused on the daunting task that recent computer science graduates are facing in gaining employment in their field. The great irony is that coding was considered the skill of the future as recently as 2021 when 104,000 degrees were awarded to computer science students. Sadly, just a few years later, the unemployment rate for those majoring in computer engineering is second only to that of anthropology graduates. Moreover, a large number are employed in jobs not requiring a college degree.
It turns out that this problem extends far beyond the tech field. According to the New York Federal Reserve Bank, 43% of all US college graduates age 22 to 27 were underemployed in 2025 which means they were stuck in jobs that do not require the degree they earned. That is 3% higher than the prior year figure.
There are several explanations for this sad state of affairs. The first is AI which is altering the job market in several ways. AI has replaced many lower-level roles in white-collar industries. Additionally, uncertainty regarding the long-term impact of AI leads to caution in hiring on the part of many companies. This uncertainty has created a sluggish job market in which some employers have been able to fill junior roles with more experienced workers.
According to Lightcast, a labor market analytics company, there are at least two other important factors. The first is an imbalance in supply and demand. From 2004 to 2024, the number of graduates rose by 54% whereas the number of entry-level jobs grew by only 42%. Second, there is a mismatch between what students are studying and the needs of today’s job market. Bloomberg estimates that the number of entry-level jobs per graduate has declined over the past decades in 22 of 35 fields of study. Critics suggest that educational institutions have not modernized their curricula, and students are selecting fields of study that do not match with the current needs of the economy. As just one example, Bloomberg points out that the number of college grads in health care related fields only increased by 5% over the past ten years while there were 1.9 million entry-level job openings as of 2024.
One consolation is that most grads eventually found appropriate jobs following the Great Financial Crisis which produced underemployment rates similar to today’s figure. Let’s keep our fingers crossed for those who have worked hard and taken on substantial debt in pursuit of a rewarding career.