Transcript

For decades, a clear promise defined the  aspirations of young adults worldwide. If

you went to university—even if you accumulated  some debt—you got a ticket to the middle class.

That ticket guaranteed a white-collar job  and a salary premium over non-graduates. It

also paved the way to homeownership. That promise has been broken – the

golden ticket turned out to just be  a coupon for 10% off a student loan.

We are witnessing a rare economic shift. A growing  economy usually rewards the effort taken to get

an education. Yet today, the economy has been  expanding while the door for graduate employment

has been closing. In May 2024, Oxford Economics  reported a statistic that defines this new era.

For the first time in 45 years, the unemployment  rate for recent university graduates in the

United States exceeded the national average.  Now while this is not great – it is by no

means a disaster – as US unemployment – while  rising is still hovering near all-time lows.

This inversion is partly a story of supply. In  1960, only about 5 percent of young people in

the UK went to university. By 2007, that figure  had risen to 43 percent. The United States saw a

similar trajectory, with the share of adults  holding a degree jumping from 7.7 percent in

1960 to nearly 38 percent in 2023. The degree –  which was once a rare signal of elite capability,

has become a baseline expectation. As scarcity  disappeared, so did the pay premium.

It is not just the number of graduates  that have been growing either, there

has been grade inflation too. In the UK, for  example – the proportion of students awarded

a First-Class degree went from 7 percent  in the mid-90s to 26 percent today. The

problem with grade inflation like this is  that – if everyone is special, no one is.

In September 2025, unemployment among  20–24-year-olds in the United States hit 9.2

percent, rising sharply from 7 percent a year  earlier. Broader data from Bloomberg reveals that

Americans with four-year degrees now account for  more than 25 percent of all unemployed workers.

This ratio has climbed to an all-time high,  surpassing even the temporary peak reached

during the pandemic layoffs of March 2020. The crisis can be seen in the frantic activity

required to just stand still. According to High  Fliers Research, final-year students in the UK now

make an average of 21.7 job applications each.  This nearly doubles the number of applications

made just two years ago in 2023 – yet success  rates have plummeted to their lowest levels in

three decades. Only 27 percent of UK final-year  students had a job lined up by February 2025,

down from 33 percent two years earlier. Graduate  job postings have plummeted in key sectors:

falling 78 percent in human resources, 46 percent  in marketing, and 42 percent in accounting.

While this is happening – the supply of  graduates keeps rising, with over 465,000

finishing their first degree in the UK last year. John Burn-Murdoch, the chief data reporter at the

FT, highlights that the most striking feature  of this new landscape is the gendered nature

of the divide. The collapse in graduate  hiring has hit young men the hardest.

Detailed employment data from the US reveals that  the unemployment rate for recent male graduates

has jumped from under 5 percent to 7 percent over  the last year. For female graduates, the rate

remains unchanged. Women gained 135,000 jobs last  year, including nearly 50,000 in healthcare alone.

Men cluster in fields like tech and finance.  These sectors have been purging entry-level

roles after pandemic-era hiring binges. They  are also aggressively embracing automation.

Large Language Models now perform tasks young men  were once hired to do, such as writing basic code,

analyzing spreadsheets, and managing data.  Bloomberg reported last month that OpenAI had

hired more than 100 ex-investment bankers to  train its AI on how to build financial models

as it looks to replace the hours of grunt work  performed by junior bankers across the industry.