An article in the FT last week puts recent concerns about increased graduate unemployment in a wider context, https://on.ft.com/3VYJ3sk (though you might find this paywall protected)
According to the FT, in the US, unemployment among recent college graduates is up 1.3 percentage points from its mid-2022 low. Concerns about the current economic climate and the future role that AI might play has resulted in a serious downturn in recruitment to entry level roles with firms holding on to ageing existing staff rather trhen recruiting new ones.
With UK graduate job vacancies down by 33% compared to 2024, surveys report up to a hundred applicants for each post as employers turn to AI bots to sift through candidates. According to one report there were just 17,000 graduate level jobs advertised in 2024 in the UK, attracting 1.2 million applications. There’s also no guarantee that some of these vacancies really exist. They may be advertised simply to enable employers to collect more data about potential applicants.
But according to the FT, recent US labour market entrants without a degree, have seen 2.4-point rise – almost double that of graduates – in unemployment. The situation is similar in Europe. Regardless of education level, all young people attempting to enter the labour market are suffering with those with lower levels of educational qualifications more so – it’s estimated that as few as 1 in 15 of NEETs in England and Wales are graduates, compared with 21% of young people with no qualifications.
Rather than looking at the jobs market in terms of matching skills with vacancies as neo-classical economic theories do, it’s more useful to see it as a ‘labour queue’ where, with the exception a small number of highly specialised occupations, employers recruit candidates based on generic characteristics, rather than narrow job attributes, such as ability to perform distinct tasks – which are mostly learned in the workplace anyway. For example, employer surveys show they continue to value those with ‘experience’; seeing them as more likely to be able to pick up the skills and competencies that a new role requires.
Young people, who in the absence of what were once considered ‘youth jobs’ and with few apprenticeship opportunities, now find themselves in competition with adults, constitute a ‘reserve army’ of labour. They are blamed for not being ‘ready for work’ when the labour market is tight but are the first to be ‘let go’ when things start to cool off.
Because they have little direct knowledge, (or even interest?) in classroom procedures, individual employers tend to rely on educational practitioners’ perceptions of what constitute high status qualifications. Thus graduates (who employers generally also consider ‘more mature’) will be further up the queue than school leavers.
Those towards the front of the queue will always have an advantage over those lower down because by having to take jobs that they might consider they are ‘over-qualified’ they will displace and by implication push them further down the queue. Though graduates may be unemployed for a period after leaving university, statistics show that they generally find employment – if not in the area or at the level they had planned. In contrast, those at the end of the line have nowhere to go, the reason why over 50% of NEETs have never worked.
Government initiatives that seek to Improve individual levels of qualifications and provide work placements may make those at the back of the queue more attractive relative to others; but unless there is a general increase in the number of employment opportunities the labour queue will not be shortened , at best it can only be reordered.
It is a lack of employment opportunities which is the real issue facing many of generation Z.
Education, Economy and Society 