Thousands of newly graduated students in the US are entering a turbulent labor market as new job openings drop sharply, federal budget cuts shrink opportunities in the public sector, and artificial intelligence (AI) transforms hiring practices.
Julie Patel, who just completed a master’s degree in public health at New York University, said, “The expectations when I started the program and when I graduated to find a job are completely different.” She faces cuts in government research funding, which have led universities such as Duke, Harvard, and the University of Maryland to freeze hiring.
The latest report from the US Bureau of Labor Statistics showed 6.9 million job openings in March, but the number of people quitting to seek new opportunities declined. Elise Gould from the Economic Policy Institute noted, “Low hiring rates mean new entrants to the market struggle to find a foothold.”
The US economy added only 115,000 jobs in April, concentrated in healthcare, transportation, and retail. Office-based sectors such as finance lost 11,000 jobs, and information services lost 13,000. Compared with the same period last year, the pace of job creation has slowed sharply.
Aleksandar Tomic, Associate Dean at Boston University, described this as a “no-hire, no-fire environment,” where experienced workers compete intensely with recent graduates.
The rise of AI has exacerbated the problem. According to the Stanford Digital Economy Lab, jobs for entry-level workers fell by 16% in industries affected by AI, while demand for experienced workers increased. Dario Amodei, CEO of Anthropic, predicted that AI could eliminate half of all low-level office jobs within five years.
A Gallup survey found that only 22% of Gen Z are excited about AI, down 14% from last year. Stephanie Alston, CEO of recruitment firm BGG Enterprises, said, “For the first time in decades, new graduates are competing with Millennials, Gen X, and even Baby Boomers who have been laid off because of AI.”
Hiring processes have also changed. Many students now undergo AI interviews before meeting human recruiters. Courtney Gladney, a graduate of LeMoyne-Owen University in Memphis, recalled, “Sometimes I need a real interviewer to read me, not an algorithm.”
The unemployment rate for recent graduates now stands at 5.6%, higher than the national average of 4.2%. The rate of underemployment remains at 41%, little changed from 10 or 20 years ago.
Christopher Davis, President of LeMoyne-Owen University, emphasized, “A degree may get you an interview, but soft skills get you the job and help you keep it.”
