The College Degree Was Supposed to Be the Advantage. The Job Market Is Telling a Different Story

The U.S. job market is showing a surprising divide: younger workers without college degrees are experiencing unusually strong employment conditions, while younger college graduates are facing a much tougher market.

For workers ages 22 to 34 who never graduated from college, unemployment is near one of its lowest points in two decades. The opposite trend is emerging for younger college graduates, according to a report published by The Wall Street Journal on Sunday.

Degree Advantage Narrows

Burning Glass Institute chief economist Gad Levanon compared each group's current unemployment rate with its own history since 2003 rather than comparing raw unemployment rates. That measure shows younger college graduates near the weaker end of their historical range, while workers without degrees remain near some of their strongest readings.

College graduates still have lower unemployment in absolute terms. For workers ages 25 to 54, the unemployment rate averaged 2.7% for degree holders over the 12 months through July, compared with 3.6% for workers with some college education and 4.7% for those with only a high-school diploma.

"There’s a rapidly growing supply of people with a bachelor’s degree, and you have a rapid decline of people who don’t," Levanon said. "I don’t think it’s a temporary thing," according to the report.

The divide also appears across occupations. Construction, manufacturing and other physical or in-person jobs are performing better by their own historical standards, while knowledge-heavy roles are under greater pressure./p> div class="bz-read-next-block" data-variant="card" data-news-mode="manual" >

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AI Changes The Mix

Research from Goldman Sachs Group (NYSE:GS) has pointed to weaker employment trends in several AI-exposed industries and greater pressure on junior workers. At the same time, a Bank of America analysis found little evidence of a broad AI-driven job collapse, while construction and manufacturing tied to AI infrastructure continued creating jobs.

The labor-supply side is also changing. U.S. labor-force data has shown weaker participation, with retirements, immigration and changing participation patterns affecting the number of workers available.

Levanon said it remains an open question how long the weakness in entry-level professional jobs will last and how much automation will eventually affect blue-collar and service work.

For now, America's labor market is rewarding some workers without degrees while making the traditional path from college to a first professional job increasingly difficult.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors./p> div class="bz-read-next-block" data-variant="card" data-news-mode="manual" >

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