Why the current job market has been such a bad match for the college degree and recent grads

When Jenny Flora Wells graduated from Ohio State University in 2021 with her master’s degree in social work, she applied for 400 jobs. From that crop, she landed three interviews.

“I was told an MSW was a golden ticket and that I would be sure to find a job. I did everything by the book, had a 4.0 GPA, worked with career services, and quadrupled-checked my resume. I did everything by the book, and I still couldn’t land a job,” said Wells.

Wells now helps other recent grads traumatized by their job search. She is a licensed social worker who practices in Los Angeles. While searching for a job, Wells landed an internship in OSU’s career services department, which helped her build a specialty in the niche field of counseling job seekers.

“What we are seeing from these younger generations is that they are working harder than ever but have nothing to show for it because no one will give them a job,”  Wells said.

What Wells experienced personally and now sees professionally – grads confounded and mentally exhausted by the unforgiving job market — is confirmed by labor analysts and academics.

A new bifurcation in strong labor market

“What we are experiencing now is a bit of a bifurcation of the labor market. The roles that need filling are often very heavily skewed towards those with less than a bachelor’s degree,” said Rachel Sederberg, senior economist and research manager at labor analytics firm Lightcast.  

“We are hearing this from students, but also seeing labor market data backing it up,” said Sederberg, who is also an adjunct economics professor at Stonehill College, and added that she sees student frustration first-hand.

For instance, Lightcast’s data shows that job postings for bachelor’s degree holders with two years or less of experience from Jan-May ’23 to Jan-May ’24 saw little difference in top occupations, industries, and skills demanded. However, there were 148,500 fewer job postings in that period for ’24 than in ’23.

For jobs that don’t require a degree, openings are up slightly from last year, from 65.75% of postings in 2023 to 65.98% so far in 2024.  However, according to Lightcast’s data, 8 of the top 10 job postings in March were ones that did not require a college degree.

“For jobs that don’t require a degree, we don’t have enough workers by any stretch, and they are having a great experience trying to find jobs,”  Sederberg says, adding that there is strong demand in the trades, retail, hospitality, and leisure.

“That is partly because we have gotten back to our lives after four years of Covid, and we see a lot of the baby boomer generation aging out of the workforce, leaving a lot of openings. The average age of those in the major trades is quite high, and we need to backfill; we can’t go without plumbers, for instance,” Sederberg said.

Not a degree job crash, an applicant mismatch

Part of what Sederberg says we are seeing is a job market simply coming back down to earth for grads, but hardly crashing.

“We are by no means in a weak labor market; we got used to the incredible strength and chaos of the last two years,” Sederberg said. She noted that there were juniors in college who had already snagged a job pending completion of their degree because so many companies ramped up hiring during the pandemic’s immediate aftermath.

Not only is there a bifurcation between those who hold degrees and those who don’t, but there also is a similar gulf in the degree skills market, with some jobs drawing scores of applicants while others sit unfilled, making the competition for the jobs recent grads want even more intense.

That’s a dynamic that Cindy Meis, director of undergraduate career services at the Tippie College of Business at the University of Iowa, says she is seeing as well in what she described as a fragmented and uneven job market. There are a record number of job postings on platforms her office uses to help grads connect with prospective employers, like Handshake, but the numbers don’t tell the whole story.

“The jobs out there don’t always align with the wants and needs of the candidates. There is a mismatch between the needs and the talent pool,” Meis said.

That means some jobs get an avalanche of applications while other application inboxes remain empty.

There are plenty of applicants for marketing jobs, “but accounting degrees? We can’t produce them fast enough,” Meis said. She added that most recent graduates have different experiences they are trying to get out of work than their slightly older counterparts. The newly graduated want to return to the office, while older workers are more open to maintaining pandemic-era home office work.

Don’t over rely on college as difference maker

“Employers are keenly aware that nontraditional pathways to the workforce, not just college degrees, provide people with the skills and experiences to qualify for many jobs,” said Christina Schelling, Verizon’s Chief Talent and Diversity Officer, who oversees the talent pipeline entering the company.

Schelling says the 2024 job market for grads is strong, but focusing too much on degree attainment alone is a mistake. Approximately 99% of Verizon’s over 100,000 jobs do not require a college degree. She added that soft skills — like collaboration, critical thinking, and empathy — are more important than ever.

“It’s easier to teach someone a technical skill than how to be resilient and find creative solutions to problems,” Schelling said. “That’s why, in interviews, candidates must highlight their appetite for continuous growth and intellectual curiosity. Large companies, now more than ever, are investing in employees and are committed to building skills.”

Some labor market experts see burdensome application requirements among the undercurrents roiling an already difficult job market for grads.

“The hiring process is broken,” said Justin Marcus, co-founder and CEO of Big 4 Talent, which matches college graduates with some of the hardest-to-fill positions in finance and accounting.

Marcus says that new grads don’t have the patience or time to laboriously go through some of the increased hoops required to work with applicant tracking systems that require uploading a resume and manually filling out questions. Marcus also says everyone – employers and grads – is pickier. Companies are pickier and require experience for even “entry level” roles.

“It certainly depends on the vertical, but a lot of ‘white collar’ jobs are raising their requirements due to an abundance of applicants,” Marcus said.

In the end, he says a grad’s job market’s prospects will vary depending on where they are, what they are applying for, and what they want. A single unemployment number isn’t telling the same story anymore.

“Unemployment trends are very sector, geographical, and level-specific,” Marcus said.

Meanwhile, Wells, finds a lot of mental health angst among her clients, who expected a glide path to prosperity after obtaining their degrees.

“Everybody told you that if you go to college, get your masters, niche out, you will succeed and you can have a comfortable life and live the American Dream, but what I am finding is it is much more complex than that,” Wells said. “In 2024, the job market is drastically changing.”