Graduates choose to attend college instead of heading straight into the workforce for a range of reasons, be it furthering their studies in a specific field or gaining qualifications needed for a certain role. But their motives often boil down to one thing: landing a career in the profession of their choice.
It seems that in 2025, those dreams are falling flat.
According to the most recent data published by the Federal Reserve Bank of St. Louis (FRED), the unemployment rate for college graduates with a bachelorโs degree sat at 6.1% in Mayโup from 4.4% just a month prior.
Likewise, the unemployment rate for those ages 20 to 24 with some college experience but no degree, as well as those of the same age demographic with a masterโs degree or higher, spiked last month.
FRED reports that Gen Z with a masterโs or higher now have an unemployment rate of 7.2% while those with some college experience have an unemployment rate of 9.4%.
According to analysis by the Wall Street Journal, that picture is even more dire. Citing micro data from the Labor Department, the WSJ estimates graduates have an unemployment rate of 6.6% over the past 12 months ending in May, the highest level in a decade with the exception of the pandemic spike.
This trend of increasing unemployment is at odds with the picture of the rest of the U.S., where unemployment held steady at 4.2% from April to May, elevated only a little from the rate 12 months ago.
Itโs perhaps no surprise then that the graduates who do land entry-level jobs tend to stay in them, for fear of being stuck in a stagnant market. Meanwhile, grads who didnโt land a role find it difficult to get a foot onto the career ladder.
As researchers from Oxford Economics reflected in a study last month: โThose in the professional, scientific, and technical services are less likely than their peers to seek employment in a different industry, though they are more likely to accept underemploymentโdefined as a college graduate who is employed in a job where more than 50% of workers in the same role do not have a bachelorโs degree or higher.โ
Indeed, while some young potential staffers are willing to take sideways steps in order to earn an income, the analysts suggested Gen Z grads are having a harder time than most: โThe upshot is that the unemployment rate for recent college graduates will remain elevated in the near term without a surge in demand from tech companies or a mass exodus from the labor force by these individuals, both of which seem unlikely.
โWhile these workers only account for around 5% of the workforce, they have played an oversize role in pushing the national unemployment higher.โ
Alternative Routes
An argument could be made that the data suggests employers arenโt finding the skills they need in newly minted grads, despite the tens of thousands of dollars many will have forked over to achieve their degrees.
JPMorgan Chase CEO Jamie Dimon, for example, has pushed for education reform to rank colleges based on whether its students land jobs as opposed to how many of them graduate.
โIf you look at kids they gotta be educated to get jobs. Too much focus in education has been on graduating collegeโฆIt should be on jobs. I think the schools should be measured on, Did the kids get out and get a good job?โ Dimon told Indianapolis-based WISH-TV last year.
The idea that college is the only way to land a well-paid job is also inaccurate, he added, saying 17-year-old bank tellers can take home $40,000 a year โand if you happen to have a family at 18 or whatever, you get $20,000 in medical benefit for your family. You can be a welder, you can be a coder, you could be cyber, you could be automotiveโall of those jobs are $40,000 to $60,000, $70,000 a year.โ
Dimon, a veteran of Wall Street, has also argued educators should focus on skills which will stand individuals in good stead for the rest of their lives such as nutrition and financial literacy.
The JPMorgan Chase boss isnโt alone. In a WSJ op-ed last year titled โNot Everyone Needs a College Degree,โ the CEOs of Home Depot and Walmart U.S., Ted Decker and John Furner, wrote: โYoung people have been told for decades that achieving the American dream requires a college degreeโฆWhile a college degree is a worthwhile path to prosperity, it isnโt the only one.โ
They added: โThe American dream isnโt dead, but the path to reach it might look different for job seekers today than it did for their parents. We owe it to younger generations to open our minds to the different opportunities workers have to learn new skills and achieve their dreams.โ
Written by Eleanor Pringle for Fortune as โNew graduates are having such a hard time finding jobs theyโre now having an โoversizeโ impact on Americaโs unemployment rateโ and republished with permission.
