Headwinds, including a long period of economic instability, fears of a trade war, technology developments, and high employment expectations, are disproportionately impacting newly minted college graduates. But despite the obstacles, young people have no choice but to launch their careers, and HR professionals should do everything they can to help them.
The Federal Reserve Bank of New York has announced that recent grads’ unemployment is nearly six percent (5.8), up more than one full percentage point from 2024 and the highest rate since 2021. More troubling, though: underemployment – defined as working in a job that doesn’t require the degree(s) one has obtained – has reached 41% for recent grads.
Ongoing economic shocks
The cause is multi-factorial, and as an article by Derek Thompson of The Atlantic cites, we can start with the notion that college grad employment never recovered from the COVID-19 pandemic or even the Great Recession. Both situations resulted in hiring freezes, mass layoffs, and rising inflation. Basically, for the last 15 years or so, recent grads have been having a tougher time landing that first job than prior generations.
Trade war fears
Recent tariffs have not helped matters, sparking fears of a broader trade war. NBC reports that globally, organizations and consumers alike are growing more alarmed about their financial fitness. Many companies are already missing their earnings estimates, and the ongoing uncertainty is almost certainly resulting in hiring pullbacks.
AI-based technologies
Then, there’s the idea that AI-based technologies are actively replacing entry-level jobs. Even as a recent Carnegie Mellon experiment showed that a company run exclusively by AI agents isn’t remotely ready for prime time, many organizations are jumping to automate as many jobs as possible, as quickly as possible. Because we already know that AI-based technologies are best at simple and routine tasks, entry-level human jobs are sometimes the first to go.
High expectations
According to Monster’s State of the Graduate Report, 75% of 2025 college grads are concerned their job prospects are being affected by the economy, and 48% worry they won’t be able to find a job at the workplace they prefer. But these fears haven’t necessarily made them more realistic. For example, Monster finds that less than two in five new grads are willing to accept working in an office, and 42% would never accept a job at a company that doesn’t offer flexible schedules.
For the rest of the post, head over to the Dayforce website.