Recent college graduates are facing a challenging job market, with the unemployment rate for those holding bachelor’s degrees reaching 6.1% in May, up from 4.4% in April, according to the Federal Reserve Bank of St. Louis (FRED). The situation is even more difficult for individuals with master’s degrees, as their unemployment rate stands at 7.2%. The underemployment rate has also risen sharply to 41.2%, as reported by the New York Federal Reserve. ADP noted that hiring in May slowed to its lowest level in over two years.
This trend of increasing unemployment and underemployment among recent graduates appears more severe compared to the overall U.S. unemployment rate, which has remained stable at 4.2%. A new report from Oxford Economics indicates that individuals with bachelor’s degrees or higher now have a higher unemployment rate than the national average, marking the first time this has occurred in the last 45 years. Matthew Martin, senior economist at Oxford Economics, emphasized that this is unusual since those with higher education typically have better job prospects than their less-educated peers.
The job market for graduates is becoming increasingly difficult. While graduates have historically struggled to find their first job after college, current conditions seem even worse. Experts are uncertain about the exact reasons for this decline in job prospects but have proposed several theories.
One theory suggests that the number of entry-level positions is decreasing. Handshake, a campus recruiting platform, reports a 15% drop in job postings for 2025 graduates, while the number of applicants per position has increased by 30%.
Ongoing economic uncertainty is another contributing factor. In 2024, high inflation and unstable consumer demand led to cautious hiring practices among employers, especially during the unpredictable presidential election cycle. Today, economic uncertainty has intensified due to President Donald Trump’s aggressive and frequently changing tariff policies, prompting many businesses to delay investments and hiring decisions.
Brad Hersbein, senior economist at the Upjohn Institute, noted that young people are particularly affected by economic uncertainty. He explained that entry-level positions are often the first to be put on hold when economic conditions are unstable.
A third factor, referred to as the “DOGE effect,” involves the impact of federal hiring freezes and budget cuts under the Trump administration. Several federal agencies have canceled internship programs for thousands of graduates, including those at USAID, the U.S. Foreign Service, and the summer 2025 Student Internship Program. Many previous offers to participate in these internships have been rescinded, leaving graduates without opportunities.
Technology, particularly artificial intelligence (AI), is also playing a significant role in shaping job prospects. For years, students were encouraged to pursue careers in STEM fields (Science, Technology, Engineering, Math). From 2005 to 2023, the number of computer science majors in the U.S. quadrupled. However, recent data shows that unemployment rates in certain science-related fields are even higher, including physics at 7.8% and computer engineering at 7.5%. The Oxford Economics report found that AI advancements are displacing many entry-level tech jobs. Entry-level positions in STEM fields are especially vulnerable to automation and replacement.
It is important to note that not all computer science professionals are at risk. Those with several years of experience are generally doing well. However, individuals performing lower-level, repetitive tasks are now competing with AI for jobs.
With a bleak outlook for entry-level coders, enrollment in computer science programs is beginning to decline. This year, national enrollment in computer science majors grew by only 0.2%, and many programs are experiencing a decrease. At Stanford, one of the top programs in the country, the number of computer science majors has plateaued, while Princeton expects a 25% decline in graduating computer science students.
Technology and AI are the primary drivers behind this shift, which will likely have long-term effects. AI may ultimately replace the very workers who developed it.
It is too early to draw definitive conclusions about these technological trends, but it is clear that a college degree or even a STEM degree is no longer a guaranteed path to success. New or perhaps traditional career paths may offer more opportunities.
Last year, the CEOs of Home Depot and Walmart wrote an op-ed in the Wall Street Journal titled “Not Everyone Needs a College Degree.” Ted Decker and John Furner argued that while a college degree can be valuable, it is not the only route to success. They emphasized the need to explore alternative opportunities for younger generations to learn new skills and achieve their goals.
Careers such as plumbing, electrician work, and carpentry may become more attractive, as AI and robots are unlikely to replace these roles soon. Entry-level positions in these fields offer an average salary of around $30 per hour ($60,000 annually), with skilled professionals earning double that amount, according to the U.S. Bureau of Labor Statistics. As I recently discovered when purchasing a home, it is difficult to find skilled craftsmen due to a shortage, and they are in high demand. This could become a more viable career path for young job seekers.
It seems likely that today’s graduates and entry-level applicants will need to consider alternative career paths, as traditional routes are becoming less promising.
Steven Hill was policy director for the Center for Humane Technology, co-founder of FairVote, and political reform director at New America. You can reach him on X @StevenHill1776.
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Dollar in Decline: Trump’s Economic Policies and a Falling Dollar
With many recent graduates hitting the pavement searching for work, the Federal Reserve Bank of St. Louis (FRED) says the unemployment rate for recent college grads with a bachelor’s degree hit a high of 6.1% in May, up from 4.4% in April. It’s even worse for young people with a master’s degree, which FRED reports has an unemployment rate of 7.2%. The under-employment rate also rose sharply to 41.2%, according to the New York Federal Reserve. The payroll company ADP reported that hiring in May slowed to its lowest level in more than two years.
This trend of rising unemployment and underemployment among recent college graduates looks even more dire when compared to the rest of the US, where unemployment has held steady at 4.2%. According to a new report from Oxford Economics, people with a bachelor’s degree or higher have a higher unemployment rate than the national average, which is “the first time this has happened in the last 45 years.” Matthew Martin, senior economist at Oxford Economics, told CBS MoneyWatch that this is especially noteworthy because “those with higher educational attainment usually have better prospects overall than their peers with less.”
Job market for graduates growing grimmer
At various times in the past, college graduates have often struggled to find their first post-graduation job. But now their prospects look even grimmer. And the experts are not so clear on the reasons why the college-to-job transmission belt is working so poorly. But they have some theories.
First, the number of available entry-level jobs may be declining. The campus recruiting company Handshake reports that the number of job postings on its platform for 2025 graduates has fallen 15 percent. Yet the number of applicants submitting their resumes for each available position has increased by 30 percent.
Second, ongoing economic uncertainty is playing a role. Going back to 2024, high prices and inflation led to shaky consumer demand and increased caution among employers, especially amid a rollercoaster presidential election, which contributed to hesitancy over hiring new workers.
Today, economic uncertainty is even greater, spurred largely by President Donald Trump’s aggressive and constantly evolving tariff agenda. That has led a number of businesses to hit ‘pause’ on investment and growth, which in turn affects their hiring decisions.
Brad Hersbein, senior economist at the Upjohn Institute, a labor-focused think tank, says, “Young people are bearing the brunt of a lot of economic uncertainty. The people that you often are most hesitant in hiring when economic conditions are uncertain are entry-level positions.”
A third factor is in play, let’s call it the “DOGE effect.” Under pressure from the Trump administration’s federal hiring freeze and budget cuts, several federal agencies have canceled intern programs for thousands of graduates, including those at USAID, the US Foreign Service, and the summer 2025 cycle of the Student Internship Program. Previous offers to participate in these internship programs have been rescinded, leaving these graduates stranded.
STEM jobs disappearing?
However, the most compelling factor that has attracted increasing attention and warrants continued monitoring into the future is the impact of technology, particularly artificial intelligence (AI), on job prospects. For years, young people seeking a lucrative career were urged to dive into computer science and so-called STEM jobs (Science, Technology, Engineering, Math). From 2005 to 2023, the number of comp-sci majors in the US quadrupled. But now a new wrinkle is being observed in the unemployment reports.
While the overall jobless rate has hit a high of 6.1%, the level among certain science-related occupations is even worse, including physics at 7.8% and computer engineering, 7.5%. The Oxford Economics report found that many entry-level positions in the tech sector are being displaced by recent advances in AI. Entry-level jobs in the STEM sector are particularly susceptible to automation and replacement. Says the report, “The rise in the recent graduate unemployment rate is largely part of a mismatch between an oversupply of recent graduates in fields where business demand has waned.”
Not all computer science workers are exposed to this risk. Those who graduated several years ago and have accumulated more than a few years of work experience are doing well. However, those who perform lower-level, rote work are now competing with AI bots for jobs.
With such a grim job outlook for entry-level coders, enrollment in computer science programs is starting to decline. This year enrollment in comp-sci majors grew by only 0.2% nationally, and at many programs it appears to be in decline. At Stanford, widely considered one of the country’s top programs, the number of comp-sci majors has stalled, and at Princeton, the cohort of graduating comp-sci majors is projected to decline by 25%.
The lead culprit for this dramatic shift, which will play out for years to come, is technology and AI. AI may well replace the very workers who built it.
New (or old?) career paths?
It’s too early to draw hard conclusions about these tech trends, but it seems clear that a college degree or even a STEM degree is no longer the guaranteed ticket to the American Dream it once was. Might new – or perhaps old – career paths present more opportunity?
Last year, the CEOs of Home Depot and Walmart wrote an op-ed in the Wall Street Journal titled “Not Everyone Needs a College Degree.” Ted Decker and John Furner wrote, “Young people have been told for decades that achieving the American Dream requires a college degree…While a college degree is a worthwhile path to prosperity, it isn’t the only one.” The authors continued, “The American Dream isn’t dead, but the path to reach it might look different for job seekers today than it did for their parents. We owe it to younger generations to open our minds to the different opportunities workers have to learn new skills and achieve their dreams.”
So…plumber, electrician, carpenter, anyone? AI and robots won’t replace those occupations anytime soon, and their average salary is around $30 per hour for entry-level ($60,000 per year), and double that amount for skilled journeymen, according to the US Bureau of Labor Statistics. As I discovered when I recently bought a home, it’s not so easy to hire skilled craftsmen because there aren’t enough of them, and they are in high demand. Might this become a more viable career path for more young job seekers?
It seems likely that today’s college graduates and younger entry-level applicants will have to be open to new career paths, as the old ones are starting to look more like dead ends.
Steven Hill was policy director for the Center for Humane Technology, co-founder of FairVote and political reform director at New America. You can reach him on X @StevenHill1776.
Taxes on High Incomes
The OBBB extends the 2017 tax cuts for all income levels, yet the majority of Americans would not do so for high incomes. Rather, most Americans, including a majority of Republicans in some cases, prefer raising taxes on high incomes.
The June 2025 PPC budget survey, which informed respondents of the effective income tax rates for different income levels and allowed them to set their own rates, found majorities (55-61%) raising taxes for all income groups of $200k or higher by reverting tax rates back to their pre-2017 rates. Among Republicans, majorities (53-56%) raised taxes to pre-2017 rates on all income groups of $500k and over.
Other polls have found majorities do not want to keep tax rates the same as now for high incomes, which the OBBB calls for by extending the 2017 tax cuts, and instead favor raising them. Pew Research Center found 58% in favor of raising taxes on incomes over $400k, including 43% of Republicans. The Washington Post/Ipsos survey found just 29% wanting to extend the 2017 tax cuts for income over $400k, including less than half of Republicans (46%). That same survey found 70% favoring a proposal to raise taxes on income of $2.5 million or more from 37 percent to 39.6 percent.
These views are highly consistent over time. Gallup has found that since 1992, a majority of Americans say that “upper-income people” pay too little in taxes. And polling since 2020 has found a large majority supports taxing the rich, including by raising taxes on income over $400k.
Medicaid
Medicaid reforms in the OBBB would result in at least $80 billion in cuts a year to Medicaid. The public, on the other hand, has never supported cutting spending on Medicaid. Surveys in 2025 by KFF, Ipsos, and YouGov found just 12-19% in favor of reducing spending, including less than half of Republicans in each case.
Even when the possibility of cutting Medicaid was presented as a way to reduce the deficit in the interactive federal budget survey by PPC in June 2025, less than half made a cut to Medicaid spending. Among Republicans, a bare majority reduced spending by just one percent.
Other polling has found even less support for cutting Medicaid as a way to reduce government spending and the deficit. An Ipsos survey found just 25% agreeing that “Medicaid funding should be cut to reduce government spending,” and a Marquette University survey found just 17% – including less than half of Republicans in each.
The OBBB includes a cost-cutting proposal to lower the federal share of Medicaid expansion costs. A 2025 KFF survey found 59% opposed to this proposal. Even when informed that this would reduce federal spending by $600 billion over ten years, opposition was still half (50%). And when told that most states would not make up the extra funding and many of the 20 million people covered by the expansion program would lose coverage, opposition increased to 75%.
The OBBB’s proposal to implement work requirements for many Medicaid recipients, which would reduce spending, is supported by a majority until they are informed of its likely effects on enrollment and employment. When KFF told respondents that most Medicaid recipients are already working or unable to work due to a disability or care-taker responsibilities, and many would lose coverage due to the bureaucratic difficulties of proving employment, support changed from 62% in favor to 68% opposed. When informed that a work requirement would have no significant impact on employment and would increase state spending, a majority of 60% were opposed.
Defense Spending
The OBBB increases spending on defense by about $150 billion, one of the largest increases in recent history and well above any addition that would keep the defense budget consistent with inflation. The majority of the public has consistently been against increasing defense spending. The budget simulation survey by PPC, which informed respondents that spending on the core defense budget was $860 billion in 2024, found a majority reducing it by $60 billion, with a majority of Republicans cutting it by $10 billion. The Washington Post/Ipsos survey found just 39% in favor of increasing defense spending by $150 billion.
Trendline surveys over the last few decades have never found support for increasing defense spending. The Chicago Council on Global Affairs has asked this question since 1974 and never found a majority in favor of increasing defense spending. The only time Gallup has ever found a majority saying that spending on defense is “too little” was in 1981, and it was still only 51%.
Spending on Immigration Enforcement
The OBBB calls for large increases in spending on immigration enforcement, including a border wall, deportation efforts, and migrant detention centers. Support for a border wall is popular with a majority of Americans, until they are informed of its cost; asked whether they support spending $50 billion to complete the border wall, just 36% are in favor, with 52% opposed, according to a June 2025 Washington Post/Ipsos survey. That same survey also found that spending $45 billion to build and maintain migrant detention centers is supported by just 24%, with 61% opposed. A May 2025 YouGov survey found that just 35% favor expanding Immigration and Customs Enforcement, the primary agency tasked with enforcing the administration’s mass deportation agenda.
SNAP
The OBBB includes policies to reduce federal spending on SNAP by about $20 billion a year, according to some estimates. When asked about funding for SNAP, YouGov and the Washington Post found just 17% and 23% in support of reducing funding, respectively.
Bipartisan majorities instead favor increasing SNAP spending in some cases. An April 2025 PPC survey, which informed respondents of current average benefits for single parents and individuals living alone, found bipartisan majorities increasing benefits for each group (70% and 86%, respectively). A bipartisan majority of 90% also favored the federal government providing discounts on fruits and vegetables bought with SNAP benefits, which they were told would increase government spending.
Tax Credits for Clean Energy and Electric Vehicles
The OBBB calls for phasing out tax credits for clean energy production and electric vehicle purchases. The majority of the public, however, supports keeping them. A March 2025 PPC survey found bipartisan majorities of at least eight-in-ten in favor of keeping the three major tax credits for carbon-free energy production, including over three quarters of Republicans. Yale University and George Mason University have also found bipartisan majority support for such tax credits (Republicans 57%, Democrats 93%), as has Gallup (Republicans 62%, Democrats 88%). A June 2025 Washington Post/Ipsos survey found that just 31% want to eliminate them. The March 2025 PPC survey also found large bipartisan support for keeping the tax credits for low-income consumers to buy a used electric vehicle (Republicans 73%, Democrats 87%), and for low and middle-income consumers to buy a new one (Republicans 71%, Democrats 85%).
Deficit Reduction
While the OBBB is estimated to increase the projected deficit by hundreds of billions of dollars a year, in the interactive budget survey by PPC in June 2025, majorities of Americans reduced the projected deficit of $703 billion by cutting spending by $69 billion and increasing revenues by $634 billion. Majorities of Republicans and Democrats agreed on budget choices that would reduce the projected deficit by $463 billion.
Steven Kull is the Director and Evan Lewitus is the Associate Director of the Program for Public Consultation at the University of Maryland’s School of Public Policy.