Overeducated and Underemployed: Is the American Dream Fading?
The traditional advice of "go to college, get a good job" is increasingly failing young graduates in the United States. Despite holding degrees, many find themselves struggling to secure employment, leading to a sense of disillusionment and questioning the value of higher education.
Recent data from the Federal Reserve Bank paints a concerning picture. In March 2025, the unemployment rate for college graduates aged 22–27 reached 5.8%, significantly higher than the overall unemployment rate of 4.2%. This 1.6 percentage point difference represents the largest disparity in over three decades, excluding the pandemic-related anomaly of 2021. What factors are contributing to this alarming trend?
The Degree as a 'Minimum Ticket to Ride'
One key factor is the increasing requirement for degrees in jobs that previously didn't necessitate them. This isn't necessarily due to increased job complexity, but rather a consequence of a larger pool of degree holders. Matt Sigelman, president of the Burning Glass Institute, notes that managers now view a degree as a "minimum ticket to ride," effectively raising the bar for entry-level positions.
This shift disproportionately affects young graduates entering the workforce. Suzanne Kahn, vice president of Think Tank at the Roosevelt Institute, highlights that since 2023, 85% of the rise in unemployment is concentrated among new market entrants, with college graduates experiencing a threefold increase in unemployment compared to the general population.
A Grim Outlook for Future Graduates
Looking ahead, the situation appears challenging. Sigelman projects that 10 million new college graduates will enter the workforce in the next decade, facing a job market that is increasingly hesitant to accommodate them. This oversaturation of qualified candidates creates a competitive environment where even a degree may not guarantee success.
The implications of this trend are significant, raising questions about the return on investment for higher education and the need for a re-evaluation of workforce development strategies. Are colleges and universities adequately preparing students for the demands of the modern job market? What alternative pathways can be created to ensure that young people have access to fulfilling and sustainable careers?