Why the graduates of today are screwed

Copyright © HT Digital Streams Limit all rights reserved. Economist, The Economist 6 min Read 27 Aug 2025, 12:33 IST students walk past Royce Hall at the University of California, Los Angeles, Campus in Los Angeles, (AP) Summary The bottom fell out of the labor market, sorry for the ambitious youngster. The road to a nice life was clear for decades: Go to university, find a graduate job and then see how the money enters. However, today’s hard -working young seems to have fewer options than before. Go to Tech? The big firms cut work. How about the public sector? Less sought after than it used to be. Become an engineer? Many innovation, from electric vehicles to renewable energy, is now happening in China. A lawyer? Artificial intelligence will take your job soon. Don’t even think about becoming a journalist. Across the West, young graduates lose their privileged position; In some cases, they have already lost it. Work data indicates the change. Matthew Martin of Oxford Economics, a consultation, looked at Americans between 22 and 27 years with a bachelor’s degree or more. For the first time in history, their unemployment rate is now constantly higher than the national average. Recent graduates’ rising unemployment is driven by those who are looking for work for the first time. The trend is not just in America. In the European Union, the unemployment rate of young people with tertiary education approaches the total rate for the age group (see Chart 1). Britain, Canada, Japan – all appear to be on a similar path. Even elite youngsters, such as MBA graduates, suffer. In 2024, 80% of Stanford’s graduates in the business school three months after departure, from 91% in 2021, had a job. At first glance, the students who already eat Fresco at the school’s cafeteria look happy. Look again, and you can see the fear in their eyes. Until recently, the University Lone Premium, where graduates earned more than others, grew (see Chart 2). More recently, however, it has shrunk, including in America, Britain and Canada. With the help of data on young Americans from the Federal Reserve New York branch, we estimate that the median graduate in 2015 earned 69% more than the Median High School graduate. By last year, the premium has shrunk to 50%. Jobs are also less fulfilling. A major survey suggests that America’s “graduate satisfaction gap”-much more likely graduates are to say that they are “very satisfied” with their work as non-graduates-are now about three percentage points, lower than a long-term benefit of seven. Is it a bad thing if graduates lose their privileges? Ethical, not really. No group has the right to be better than the average. But it can be practical. History shows that when Brainy people – or people who think their brain is – are worse than they think they should do, bad things happen. Peter Turchin, a scientist at the University of Connecticut, argues that ‘elite over-production’ was the immediate cause of all kinds of unrest throughout the centuries, with ‘counter-elite’ leading the charge. Historians identify ‘the problem of excess trained men’ as a contribution to Europe’s revolutions of 1848, for example. Luigi Mangione would be a member of the counter-elite. Mr Mangione, a graduate of the University of Pennsylvania, must live a prosperous life. Instead, he stands trial for the alleged murder of the CEO of a health insurer. More told is the extent to which people sympathize with his alienation: Mr. Mangione received donations of more than $ 1 million. Why do graduates lose their privileges? Perhaps the enormous expansion of universities has lowered the standards. If ivory towers recognize less talented applicants, and then do a worse job of teaching them, employers over time can expect less differences between the average graduate and the average non-graduity. A recent study, by Susan Carlson of Pittsburg State University and colleagues, indicates that many students are functionally illiterate today. An unmarried number of English majors struggles to understand Charles Dickens’ “Bleak House”. Many are roasted by the opening rule: “Michaelmas term lately, and the Lord chancellor sitting in the Inn Hall of Lincoln.” Some universities certainly offer junk courses to candidates who should not be there. On the other hand, there is little correlation between the number of graduates and the long -term wage premium: both grew in the US in the 1980s. Also talk to students at most universities, especially elite, and you will be the idea that they are stupid. Those in Stanford are furiously intelligent. Many at Oxford and Cambridge once walked around and even celebrated a “gentleman’s thire” if they were honored. No more. A new article by Leila Bengali of the San Francisco branch of the Fed and colleagues is another reason to question the graduates-with the thickness. They find that the change in the university wage premium mainly reflects “demand factors, especially a slowdown in the rate of skill -biased technological change”. In ordinary English, employers can increasingly find non-graders to do work that was previously retaining graduates alone. First class? No one cares, this is especially true of the work that the use of technology needs. Until relatively recently, many people could only get a computer by attending a university. Now everyone has a smartphone, which means that non-graduate is also proficient in technology. The consequences are clear. In almost every sector of the economy, educational requirements become less strenuous, according to a website. America’s professional and business services industry has more people without a university education than it did 15 years ago, even if there are fewer such people in the area. Employers also cut off work in graduate industries. Over the EU, the number of 15 to 24-year-olds operating in finance and insurance fell 16% from 2009 to 2024. America has only a little more work in ‘Legal Services’ than in 2006. Until recently, the obvious path for a British student hoping to make money a graduate scheme at a bank. However, since 2016, the number of twentieth in the law and finance has fallen by 10%. By the third season of ‘Industry’, a television drama about graduates at a London bank, a large part of the original cast was pushed out (or died). It is tempting to blame AI for these diminishing opportunities. The technology seems capable of automating “knowledge”, such as filing or paralegal tasks. Yet the trends described in this piece began before Chatgpt. Many conditional factors are responsible. Many industries that have traditionally employed graduates have had a difficult time. Years of subdued activity in mergers and acquisitions hampered the question of advocates. Investment banks are less good than before the global financial crisis of 2007-09. Is the college worth it? It looks like Americans didn’t decide. According to the data from the OECD, the number of people enrolled in Bachelor’s programs dropped by 5%from 2013 to 2022. But in most rich countries, where higher education is cheaper because the state plays a greater role, young people still move into universities. With the exclusion of America, the entries on the OECD rose from 28 m to 31 m in the decade to 2022. In France, the number of students increased by 36%; in Ireland with 45%. Governments subsidize useless grades and encourage children to waste time studying. Students may also not choose the right subjects. Outside of America, the share in art, humanities and social sciences is mostly growing. So, inexplicably, entries in journalism courses. If these trends reveal young people’s ideas about the future of work, they are in trouble. For more knowledgeable analysis of the biggest stories in economics, finances and markets, you must report to money talks, our weekly newsletter that is only subscriber. Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More topics #un -work rate read next story