Transcription
On May 16th, 2025, I woke up and was ready to get into my graduation gown for the day of celebration of Villanova's graduation ceremony. My family and friends came from pretty much across the country to see me walk across the stage and receive my diploma. Michael. Sean. Mathias. Yeah, Michael. I was really on top of the world. Super excited to finally have the diploma that shows my hard work over those four years. I was super excited to apply those skills to the job market, to an employer, and finally be an independent adult.
Flash forward a couple months into the job search. It's been a little demoralizing. The job market has been very tough, especially for the new grads. I have been on my job search since November 2024. I've been applying anywhere and everywhere, and it has been a little difficult to even get to the initial interviews that I want to get to. The job market is kind of trash right now. I mean, it's really difficult. It's really difficult for people who have many years of experience. So it's going to be difficult for college kids.
The rise of youth unemployment is worrisome for the individual worker. We can see that graduating in a recession leaves long-lasting scars for decades after. These workers are a vital part of the labor market, and if they're having a hard time, that means that the economy could have a hard time. For the broader economy, these youth workers might be early indicators that the overall economy is slowing down, or maybe even heading towards a recession.
For the first time in modern history, a bachelor's degree is no longer a reliable path to professional employment. If you look at the overall labor market, it's still doing strong. Unemployment rates, in general, are still fairly low. But then when you zoom in on the young workers, they seem to be struggling. The unemployment rate among young U.S. workers aged 16 to 24 stood at 10.4% in September. It's generally been trending upward since April 2023, when it dipped to the lowest point since the pandemic. And in particular, there's been a worrisome rise in unemployment rates among recent college graduates. Usually, we think of those as being some of the most, safest workers in our economy, but that pattern seems to be flipping right now.
I think that that is because two factors. One is the supply of workers with a bachelor's degree is increasing. But at the same time, partly because of AI, the demand for workers with a bachelor's degree is not increasing anymore. So we have a glut of people with a bachelor's degree. Their wage growth is growing more slowly and with AI continuing to automate more and more jobs, I expect that the trend to continue. Artificial intelligence has allowed some corporate giants to hire fewer workers, and some have even begun shrinking their workforces as they integrate more automation. Goldman Sachs says it could displace 6 to 7% of the U.S. workforce over the next decade.
Young workers are feeling AI's impact the most. A Stanford study finds that since 2022, unemployment for 22 to 25 year olds in highly AI exposed jobs has dropped 13%, while older workers and those in less exposed roles remain steady or growing. I think AI and machine learning is absolutely taking entry-level careers from new graduates like myself. From a business standpoint, it makes a lot of sense. You get something that can produce results a lot quicker. I really can't blame employers for making those steps, in my mind the right direction to save money cut costs, but it's a little frustrating from my standpoint because I'm looking for a full-time career somewhere to really put my skills to work.
Especially for larger corporations that are trying to go through AI transformation. Some of it could be tied to AI from a perspective of they're trying to let go of people in other departments so that they can invest more in AI. But at the same time, I think what's also happening is the AI systems that can write code, especially at junior level, has gotten really good. And because of that, we are already seeing, especially in tech companies, there's a need for a number of junior engineers has gotten lower.
The Federal Reserve has also taken notice. You see a significant number of companies either announcing that they are not going to be doing much hiring, or actually doing layoffs. Much of the time they're talking about AI and what it can do. So we're watching that very carefully. But there is another element here which is more and more young people are going to college and get a much higher rate than the baby boomers who are now retiring. So what's happening is that the workforce is becoming more and more educated over time, and perhaps to the degree that we have a glut of college grads. AI might be having a little bit of an impact. But I think right now what's really driving a lot of this youth unemployment is the fact that businesses just in general are not bringing on new workers. And so whether you're unemployed or whether you're trying to get in the labor market for the first time right now is a really difficult time to find a job.
Just a few years ago, many companies, especially tech firms, went on a hiring spree during the pandemic era. For example, during the Covid-19 pandemic, Amazon's workforce ballooned to 1.6 million employees globally in 2021. By 2024, the count had shrunk to 1.5 million, and 2025 is no stranger to layoffs. Amazon saying this morning it's going to lay off about 14,000 corporate employees as it restructures for the AI era, marking the latest move in a multiyear effort to streamline operations and shift resources toward its biggest bets, including generative AI.
Experts are divided on whether Covid-19 hiring sprees are behind the layoffs. Over hiring they did in the Covid era, when they didn't actually need to, the results of that are being seen now. So correlation doesn't imply causation, like it's not because of AI that people are losing jobs. In fact, because of AI, we see a lot more empowerment in people. Like small business owners are able to take advantage of AI and build amazing companies. We should probably not use this argument much anymore. It's been a long time. I think if there was overhiring, it's already been adjusted in '23, '24. We are now November '25. I think it's no longer a big impact. But I would say that the period of strong labor shortages that we had in '21, '22, '23, I think it forced companies, even without AI, or not taking AI out of the story here, it just forced companies with severe labor shortage to learn how to do things with fewer people. And that may be another factor that is impacting labor market conditions now.
Not only are young workers finding it difficult to enter the job market, but the young professional workforce is also shrinking. A recent study by compensation platform Pave finds that between January 2023 and July 2025, the number of young workers at large public technology companies fell by more than half. Private technology companies also saw a decline.
The impact that this rising youth unemployment rate could have, you know, you start playing this out over the course of years and you say, you know, if these workers have a hard time getting into jobs now, that impacts spending, right? That impacts them going out, buying things that also impacts like their earning capabilities, money going into taxes, you know, which ultimately impacts government spending, as well, right. And so you start to add these things together and it really can lead to further widening in income inequality. Economic inequality in the US is getting worse. The new Oxfam report shows that between 1989 and 2022, the top 1% gained about 101 times more wealth than the median household. We will see a much higher inequality. It's a problem today and it will be an even bigger problem in the future. It will be a problem that will have political consequences. I think what will eventually happen is that there will be growing demand for income redistribution. If you have increasing unemployment rates, especially among young workers, it might leave some with being dissatisfied with the current economy and political climate. That could have some implications for, in general, the political debate. And so we need to really be thinking about, you know, how do we make sure that we're taking care of this right now? Because it could have big spending, big economic implications down the road.
The job market is challenging for young workers as many entry-level positions. A launch pad for new graduates are disappearing. At the same time, however, Handshake, a career site for college students and recent grads, reports that employers are increasingly seeking entry-level hires who are fluent in AI. We're actually seeing from companies is an increase in desire for early talent to have AI skills. So we've actually seen a 5x increase in our job postings since 2023 that list AI skills as part of the job requirements or qualifications. And even on internships, it's been a 4x increase in that same amount of time. So employers are interested in early talent that is familiar and comfortable using AI. They do expect that early talent will be able to use AI in their functional roles, and that they will know how to balance both their expertise and knowledge, as well as productivity and efficiency.
I think, especially the younger workforce, should realize that this AI is starting to automate a lot of stuff. AI started to augment a lot of stuff, so learning how to use the tools will make them stand out when they are applying for jobs, like knowing how to prompt better, knowing how to use multiple gen AI systems if needed, where some gen AI systems are good for certain kinds of tasks. Knowing about all of these and having that literacy to be able to do different tasks better in a more efficient way because they've just become more learned on AI tools, will allow them to stand out. We should not be afraid of AI. We should actually be embracing AI for all of the places that it can help. And what it doesn't replace is really smart, creative people, and we see that all across the board. In today's AI driven workforce.
Some career experts also emphasize the importance of networking in navigating the job market. First and foremost, if you're someone who's graduating right now and you haven't done internships while you've been in school, if you haven't been working on building connections with people who are in the professional working world, you need to hurry up and get on that because the number one thing you can do to separate yourself from the pack is to have those relationships. To have someone who remembers you, who had a good experience working with you as an intern, and who wants to see you succeed. And I don't ever want to undervalue or underestimate the power of those personal connections.
I have a lot of hope going forward for the job market. I'm a little bit of an optimist in that sense. I think, you know, hard times create strong people, and I think this is just a little bit of a difficult time for those new graduates. And ultimately, those new graduates are going to become stronger people. And I think they will not take their jobs for granted in the future. And I think it'll ultimately make a stronger return.