Millions of new college graduates are entering the workforce just as entry-level job prospects are fizzling.
Despite the strong labor market, it’s becoming tougher for newcomers to break in. Hiring is slowing, especially for recent graduates, with coveted white-collar employers pulling back on new postings. Just 13 percent of entry-level job seekers found work in the past six months, down from a 2022 peak of 20 percent, according to a Goldman Sachs analysis of Commerce Department data.
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“The class of 2024 may need to buckle in for a bit of a rough ride this summer,” said Becky Frankiewicz, North America president at staffing firm ManpowerGroup. “People aren’t leaving their jobs, employers aren’t laying off. Everyone is staying put — and that’s bad news if you’re trying to get a foot in the door.”
Although the odds of finding a job have improved from pre-pandemic levels for many workers, that’s not the case for new entrants. After a recent hiring spree, many employers are scaling back on job openings. Even when they do hire, they’re increasingly looking for experienced workers who can “be immediately productive,” Frankiewicz said.
As a result, the U.S. unemployment rate for 20- to 24-year-olds has climbed sharply in the past year, from 6.3 percent to 7.9 percent as of May — the largest annual increase in 14 years, excluding the early shock of the pandemic.
That setback is just the latest hitch for the 2 million people projected to get bachelor’s degrees this year. Many started college in 2020 by logging into Zoom classes from their childhood bedrooms instead of moving into dorms and clambering into lecture halls. They’ve missed out on internships and in-person mentorships, and in many cases are graduating with thinner resumes than their predecessors.
Not as bad as 2008
Economists say, the situation isn’t nearly as dire as it was after the 2008 financial crisis, when millennials were entering the job market. Back then, the unemployment rate for young adults, which peaked at 17.2 percent in April 2010, remained above 10 percent for more than six years. By some estimates, it took about a decade for millennial employment to recover from those early setbacks.
This time around, the solid economy and continued demand are likely to help new graduates catch up much faster, said Harry Holzer, a professor at Georgetown University and former Labor Department chief economist. Industries like health care, government, and leisure and hospitality, are adding tens of thousands of jobs each month.
“There has been a bit of a slowdown in the labor market and any kind of slowing always affects brand-new college graduates first,” he said. “But this is nothing like 2008. It might take six months or nine months, but these graduates will find jobs.”