Recent college graduates face the worst job market in decades, with unemployment reaching 5.8%, according to recently released New York Federal Reserve data. The “recent-grad gap” – the difference between unemployment rates of young college graduates versus the overall labor force – has hit its lowest point in four decades, indicating college graduates are facing unusual difficulties securing employment. (The New York Federal Reserve said labor conditions for recent college graduates have “deteriorated noticeably” in the past few months.)
Even graduates from elite MBA programs are struggling to find work, while law school applications have surged as young people seek shelter from the difficult job market. Economists are attributing the decline to three potential factors: incomplete recovery from pandemic disruptions, diminishing returns on college education, and possibly AI replacing entry-level positions.
“When you think about what generative AI can do, it’s the kind of things that young college grads have done,” said David Deming, a Harvard economist. “They read and synthesize information and data. They produce reports and presentations.”
