Straws in the Wind - Part 23

From The Economist: Pity the ambitious youngster. For decades the path to a nice life was clear: go to university, find a graduate job, then watch the money come in. Today’s hard-working youths, however, seem to have fewer options than before.

Go into tech? The big firms are cutting jobs. How about the public sector? That is less prestigious than it used to be. Become an engineer? Lots of innovation, from electric vehicles to renewable energy, now happens in China. A lawyer? Artificial intelligence will soon take your job. Don’t even think about becoming a journalist.

Across the West, young graduates are losing their privileged position; in some cases, they have already lost it. Jobs data hint at the change. Matthew Martin of Oxford Economics, a consultancy, has looked at Americans aged 22 to 27 with a bachelor’s degree or higher. For the first time in history, their unemployment rate is now consistently higher than the national average. Recent graduates’ rising unemployment is driven by those who are looking for work for the first time.

The social and political consequences will be profound. And the trend is not just in America. Across the European Union the unemployment rate of young folk with tertiary education is approaching the overall rate for that age group. Britain, Canada, Japan—all appear to be on a similar path. Even elite youngsters, such as MBA gradates, are suffering. In 2024, 80% of Stanford’s business-school graduates had a job three months after leaving, down from 91% in 2021. At first glance, the Stanford students eating al fresco at the school’s cafeteria look happy. Look again, and you can see the fear in their eyes.

Until recently the “university wage premium”, where graduates earn more than others, was growing (see chart 2). More recently, though, it has shrunk, including in America, Britain and Canada. Using data on young Americans from the New York branch of the Federal Reserve, we estimate that in 2015 the median college graduate earned 69% more than the median high-school graduate. By last year, the premium had shrunk to 50%.

Jobs are also less fulfilling. A large survey suggests America’s “graduate satisfaction gap”—how much more likely graduates are to say they are “very satisfied” with their job than non-graduates—is now around three percentage points, down from a long-run advantage of seven.

Is it a bad thing if graduates lose their privileges? Ethically, not really. No group has a right to outperform the average. But practically, it might be. History shows that when brainy people—or people who think they are brainy—do worse than they think they ought to, bad things happen...

Full story at https://www.economist.com/finance-and-economics/2025/06/16/why-todays-graduates-are-screwed.

Note: There is a tendency in journalism to look for breaks in trends and project them out linearly into the future. But sometimes, the breaks turn out to be blips. Or - if not - the consequences are different than projected.