Americans Without College Degrees Are Having One of the Best Job Markets in Years

For most U.S. workers without college degrees, the job market is one of the best in decades, according to a recent analysis by labor-market think tank Burning Glass Institute. Unemployment rates for young workers with no college degree have rarely been lower in the past two decades compared to those who graduated from college, says Gad Levanon, Burning Glass’s chief economist.

While degree-holders have faced challenges, particularly those with advanced degrees or in science and technology fields, the divergence in job market fortunes is a departure from the past.

This shift is primarily due to supply and demand factors. There are not enough skilled tradespeople, as older generations retire and immigration drops. Additionally, more Americans now hold college degrees than ever before, and artificial intelligence is taking over many entry-level jobs typically taken by young graduates. "There's a rapidly growing supply of people with a bachelor's degree, and you have a rapid decline of people who don't," says Levanon.

As a result, it's becoming increasingly difficult for workers without college degrees to find employment.

The unemployment rate for workers with just a college degree averaged 2.7% for the 12 months ending in July, which is well below the 3.6% rate for workers with some college education and 4.7% for those with a high-school diploma only. However, when comparing current unemployment rates to their historical norms, the job market appears better for blue-collar workers and manual-service workers, such as construction workers, nursing staff, and retail employees. These jobs tend to have lower unemployment rates by their historical standards.

The recent jobs report also reinforced the trend, with the food services and drinking places sector adding 59,000 jobs in August, accounting for more than a third of the 162,000 jobs added to the U.S. economy last month. In contrast, college-educated workers aged 22 to 34 have experienced worsening unemployment during the past two decades, particularly during the pandemic and the economy's slow recovery from the 2007-09 recession.

Many young graduates, like Zachary Blackmon, who holds a bachelor's degree in international business and operations management from the University of Cincinnati, are finding it difficult to secure full-time employment despite numerous applications and interviews. Blackmon, now enrolled in business school at the University of Dayton, hopes that his M.B.A. will open more doors. However, he acknowledges that the challenges faced by recent college graduates are still significant.

Not all Americans are part of the labor force, which is what unemployment figures represent. Millions of people are unemployed due to illness, disability, being in school, or having given up job-hunting after long periods of unemployment. Younger workers with less education are more likely to be missing from the labor force. For example, nearly a quarter of those with a high-school diploma are not in the labor force, compared to about one in seven for those with a college or advanced degree.

Levanon suggests that recent college graduates, including his own child, broaden their horizons to improve their job prospects. The job market may be challenging for top companies, but being willing to compromise on location or job type may make it easier to find employment.