It’s grad season, and Gen Z job seekers are feeling desperate.
Zoomers are staring down a tough hiring market: Economic uncertainty has contributed to employees’ wariness to quit and companies’ hesitancy to hire. Artificial intelligence is disrupting the entry-level rung of the career ladder in industries like tech. Recent graduates have told Business Insider that they’re frustrated by hundreds of rejected applications and being ghosted by prospective employers. Some are settling for whatever work they can find.
It’s long been typical for 20-somethings to have a higher unemployment rate than the general population, and the overall US unemployment rate is still relatively low. One relatively new development, however, is that young people with college degrees are being hit hard by the economic slowdown — especially if they’re hoping to land a role in traditionally white-collar fields. Many Gen Zers are losing faith in the ROI of higher education and are turning toward blue-collar opportunities.
The following five charts illustrate the tough job market for recent graduates.
More people are graduating with a bachelor’s degree than in the past
Even as the cost of higher education has risen, more people are getting a bachelor’s degree at US schools, which means more qualified competition for the available jobs. The National Center for Education Statistics showed there were almost 2 million bachelor’s degrees conferred in the 2022-2023 academic year, up from 1.8 million a decade ago.
“We are used to thinking about college as being a meal ticket to economic opportunity,” said Guy Berger, the workforce economist in residence at Guild and senior fellow at the Burning Glass Institute. Still, he added that having a degree could bring less of a premium in the job market because there are more college graduates than in the past.
Unemployment rates have spiked for recent grads
The unemployment rate for recent college graduates ages 22 to 27 has soared compared to unemployment for all workers ages 16 to 65 in recent years. This is a new trend: young people with degrees have historically almost always been more likely to be employed than the rest of the labor force.
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The unemployment rate gap between the total workforce and recent grads was historically wide this spring, meaning that the job market for 20-somethings with degrees is among the worst the cohort has seen in at least four decades. Those who studied anthropology, physics, or computer engineering had the highest unemployment rates in 2023, per the Federal Reserve Bank of New York’s analysis of Census Bureau data.
Quit rates have fallen — and so have job openings
The pool of jobs available for Gen Z — and the workforce as a whole — to apply for has shrunk. Job openings have cooled from 12 million in March 2022 to 7 million this past April. In what’s been dubbed the Big Stay, current employees are holding on to their seats as well, with the monthly quit rate falling from 3% in March 2022 to 2% this past April.
Cory Stahle, an economist at the Indeed Hiring Lab, said college and high school graduates are entering a job market where people are holding onto their jobs and companies aren’t cutting roles or hiring new employees.
“The labor market is frozen, these seats are not necessarily opening up for these workers, and that is disproportionately impacting these younger workers,” Stahle said.
Small and midsize businesses aren’t hiring as many recent grads
Gusto, a payroll and benefits platform for small- and medium-sized businesses, found the rate of primarily white-collar hires aged 20 to 24 at small and midsize employers has fallen from pre-pandemic levels, declining from 9.4% in May 2019 to 2.7% this past March.
Still, Aaron Terrazas, an economist at Gusto, said there are US cities where new grad hiring looks strong, including in the San Francisco Bay Area and Silicon Valley. Plus, he said wage growth is accelerating for graduates.
“We all come out of school with grand ambitions and thinking our plan is set,” Terrazas said. “Being open to unexpected opportunities is particularly important in an economy like the present.”
More grads are turning to jobs that typically don’t require a college degree
Even if new graduates have a job, they may be working in a role that doesn’t typically require a college degree. While this figure fluctuates over time, the share of 20-somethings who have jobs they’re overeducated for is rising in 2025. It coincides with the generation’s pivot toward skilled-trades roles such as electricians or plumbers.
Many young people are seeing these opportunities as a safer bet compared to a corporate world hit by layoff waves and hiring freezes. Construction laborers, electricians, and truck drivers are projected to grow faster than the average job-growth rate of 4% from 2023 to 2033, per the Bureau of Labor Statistics.
Are you a Gen Zer open to sharing your job search experience? Reach out to these reporters at [email protected] and [email protected].
