As they trade the campus for the job market, fresh-faced graduates are quickly turning glum. From North America to Europe, university leavers are struggling to find suitable work. The unemployment rate for recent college graduates in the US has for the first time been consistently above the national level since the Covid-19 pandemic. In the EU, the employment rate of 15- to 25-year-olds has fallen over the past two years. Even the crème de la crème are struggling. The percentage of MBA students from Harvard Business School and MIT Sloan without a job offer three months after graduation has risen sharply since 2021.
The rise of artificial intelligence is a factor. In the US, entry-level tech jobs are coming under pressure as coding tasks are automated. The unemployment rate for computer engineering graduates is 7.5 per cent; the national rate is 4.1 per cent. In Britain, the Big Four accountancy firms have cut back on early-career hires in recent years. Economists and recruiters reckon higher costs are encouraging UK professional services firms to experiment with AI in more administrative tasks usually conducted by juniors.
But the plight of graduates predates the emergence of large language models in the workplace. Other structural developments are at play. As more young people around the world are choosing to go to university, competition for jobs has picked up. In Canada, a popular destination for young graduates, the unemployment rate for those under 25 with post-secondary education was 11.2 per cent in the first quarter. Last year in the UK there were an average of 140 applications per graduate job — the highest in three decades, according to the Institute of Student Employers.