Young adults have long been told that a college degree is the surest path to landing a good job.
But more recent job market data suggests that, at least for recent graduates entering the workforce today, that advantage may be shrinking.
While unemployment among workers with bachelor’s degrees remains lower overall than for those without degrees, younger non-college workers are experiencing some of the strongest labor market conditions in decades, according to a new Burning Glass Institute report.
At the same time, the New York Fed has reported that recent college graduates are facing higher unemployment and underemployment rates. This raises new questions about the value of a four-year degree in today’s labor market, experts say.
“A college degree is no longer a smooth entry into a career like it used to be,” Brian Pulliam, a tech career coach and the founder of Refactor Coaching, told Newsweek. “A college degree can pay off, but the numbers aren’t as rosy as new grads would prefer.”
Why It Matters
Economic uncertainty has made employment prospects a major concern for Gen Z. For years, college graduates generally enjoyed lower unemployment rates and higher earnings than their peers without degrees.
While that still remains true in the long run, new data suggests the transition from school to work has become significantly more difficult for new graduates. However, young workers without degrees are able to find opportunities in sectors facing persistent labor shortages like the trades.
What To Know
According to the Federal Reserve Bank of New York’s Labor Market for Recent College Graduates tracker, labor market conditions for recent graduates remained challenging through the second quarter of 2026.
The unemployment rate for recent college graduates, which is defined as those ages 22 to 27 with at least a bachelor’s degree, was about 5.7 percent in the second quarter.
Meanwhile, the underemployment rate, which measures graduates working in jobs that typically do not require a four-year degree, climbed to roughly 42 percent.
Still, Brian Daniel, the founder of staffing agency The Celebrity PA Network, said candidates with a college degree still invariably have an advantage.
“This is mainly because of the volume of candidates applying for jobs. Because employers are flooded with applications, they can be very selective about who they choose,” Daniel said.
“While many ‘talking heads’ comment about how a BA degree isn’t as prestigious anymore, they aren’t hiring managers, so you should be careful who you listen to.”
Right after the pandemic, college graduates enjoyed an unusually strong job market, but today many are struggling to secure positions that are actually aligned with their education.
“It is becoming more difficult because the jobs people need to maintain a certain lifestyle are becoming harder to attain,” Kevin Thompson, CEO of 9i Capital Group and host of the 9innings podcast, told Newsweek. “The kinds of jobs being presented to recent college graduates leave many struggling when you factor in the rising cost of living and simply maintaining a lifestyle.”
Non-College Workers Are Seeing a Different Reality
A recent study by the Burning Glass Institute found unemployment among workers ages 22 to 34 who do not hold college degrees is near the lowest level seen for that group in more than two decades.
The think tank found the unemployment gap between college graduates and non-graduates has narrowed to its smallest level in roughly 30 years.
Recent grads’ lived realities reflect this as well.
“I still think a university degree is useful as a first signal.” Reese Wong, a recent graduate and current strategy and consulting analyst at Accenture, told Newsweek.
“As AI makes it easier to produce polished applications, it can also become harder for employers to tell what someone can actually do from a CV alone. A degree gives them a baseline of verified competence. But it’s only a starting point.”
So while degree holders may still enjoy an advantage overall, young workers without degrees are no longer facing the same labor market disadvantages that characterized much of the 2000s and 2010s.
“For Gen Z, the problem is increasingly one of signaling,” Natalia Bielczyk, computational neuroscientist and founder of career intelligence platform Ontology of Value, told Newsweek.
“A degree tells an employer that someone completed an educational program, but it does not necessarily tell them what that person can produce on day one, whether they understand the business, or whether they can navigate an AI-augmented workplace. At the same time, skipping college does not automatically create an advantage.”
Is It Actually Easier to Get a Job Without a Degree?
The answer to whether it’s easier to get a job without a degree depends on what comparison is being made.
Compared with young non-degree workers a decade ago, today’s non-college workers appear to be in a substantially stronger position.
But compared with other young workers today, college graduates still generally have lower unemployment rates overall and tend to earn more over their careers.
“The question employers increasingly need to answer is not who has a degree but who can demonstrate that they can solve our particular problems?” Bielczyk said.
“This creates an unusual situation for Gen Z. College can still provide valuable networks, structured learning, internships, signaling, and access to professions where credentials remain essential. But students who graduate without a clear connection between their education and a specific labor-market opportunity can discover that the degree was only the beginning of the job search, not the solution to it.”
For many recent graduates entering the labor market right now, finding that first professional job has become harder than it was several years ago.
Recent graduate unemployment has increased since 2023, while underemployment has climbed to its highest levels since 2020, according to New York Fed data.
The AI Factor
Some believe artificial intelligence is helping drive this new shift.
Many entry-level white-collar positions traditionally filled by recent graduates involve routine tasks such as research, administrative work and data processing. Those are also among the jobs most susceptible to automation through generative AI tools.
“Hiring managers are learning that as job descriptions change around the implementation of AI, relying on degree requirements or years of experience can leave critical positions unfilled,” Greg Summers, the CEO of Orion Talent, a talent and recruitment firm, told Newsweek.
Many of the occupations most difficult to automate are ones not necessarily requiring a degree, like construction, maintenance and the skilled trades.
Some of the problem falls on the lack of entry level training that companies are offering as well, according to HR consultant Bryan Driscoll.
“We’ve spent years stripping training and development out of entry-level work while simultaneously complaining that young applicants aren’t job ready,” Driscoll told Newsweek. “You can’t demand three years of experience from a 22-year-old and then complain that nobody has experience. Somebody has to give them the first three years.”
What to Watch in Today’s Job Market
Experts largely say it is still too early to conclude that college has lost its economic value.
Workers with bachelor’s degrees continue to have lower unemployment rates overall and typically earn significantly more over a lifetime than workers with only a high school diploma.
“College degrees lead to higher incomes. What has become dislocated is the relationship between the degree, the job, and the income needed to maintain a certain standard of living,” Thompson said.
Thompson also warned against listening to those “at the top” calling for students to forgo their college educations, as they are often already benefiting from their college degrees.
“As long as the people at the top keep convincing those at the bottom that education is too costly for them, those at the top can simply increase the supply of lower-skilled labor and depress the wages they have to pay,” Thompson said.
Still, the labor market does appear to be undergoing a structural shift.
The question is no longer simply whether someone has a degree. Employers increasingly are instead focused on whether workers possess skills that are difficult to automate and directly connected to the current labor market needs.
For Gen Z, that could mean the gap between college and non-college is becoming less clear cut than it was for previous generations.
“The degree opens some doors and closes others, but what gets you hired is showing you can do the work,” Curtis Serna, a career coach and the founder of Noticeable, told Newsweek. “Many employers still use a degree as a filter because it’s easy, not because it predicts success. Without one, you need another way to prove capability.”
What Happens Next
The coming years will likely reveal whether this is a temporary post-pandemic adjustment or the start of a broader transformation in the job market.
If AI continues replacing routine entry-level office work and demand stays elevated for trades and technical occupations, recent graduates could face higher competition for a shrinking pool of traditional post-grad jobs.
“Twenty years ago, a college degree was the ‘ceiling’ and today, for many jobs, it’s the floor,” Nicki Joiner, founder of the Career Corner at the Career Company, told Newsweek. “That doesn’t mean it doesn’t have a value. It means the degree alone isn’t enough. Employers want and sometimes require a degree plus evidence that you can actually do the work.”