Why more college graduates are facing long-term unemployment

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For decades, long-term joblessness in the US was the norm for non-college-degree holders. That is slowly changing. Government data show that one-third of unemployed individuals who have been out of work for more than six months hold a college degree, up from just one-fifth a decade earlier. The trend is accelerating, indicating both general economic shifts and a labour market no longer offering opportunity to highly educated workers, according to the New York Times.

When skills do not ensure security

Sean Wittmeyer, 37 and holder of two master's degrees and experience in product design and architecture, has been looking for a job for 18 months. He has applied for internships, store jobs, and professional employment, at times being told he is "overqualified." Ex-marketing director Katie Gallagher has filled out more than 3,000 applications in one year with no results to show for it, describing the depression and anxiety of repeated rejection. Their stories are now becoming increasingly common: previously stable professionals desperate for a lifeline.

Economic shifts behind the numbers

Several reasons explain the reversal. The decline in building construction following the hikes in interest rates in 2023, the wholesale layoffs of tech workers, and President Trump's cutbacks in government outlays disproportionately affected white-collar employment. At the same time, demand for skilled tradesmen and service workers has remained steadier, lowering the relative percentage of long-term unemployed with no degree. Economists have termed the trend as a "restructuring" where entire types of high-skill occupations are vanishing quicker than employees can retrain.

The contribution of automation and AI

Automation has weakened demand for college-level labour across sectors. Accounting software, contract-management software, and AI platforms have substituted jobs previously done by professionals. The arrival of generative AI has accelerated the process: functions that previously required talented coders or designers can currently be performed with off-the-shelf tools like ChatGPT or Claude. As Harvard economist Lawrence Katz summarized, "substantial improvements in AI starting around 2016" laid the foundation for the current labour market, whereby even older workers lose their jobs.

Personal and psychological costs

The price of prolonged unemployment is not solely financial. Some of them described depression, anxiety, and even suicidal thoughts. Gallagher has incurred debt on his credit cards and borrowed money from relatives in order to retrain in automation, while Wittmeyer is trying to make a living out of his board-game hobby. Others, such as Charlene Chen, a corporate lawyer, have gone round the houses in temporary jobs, one being so demoralizing she quit after a day. To most, the struggle wears down the very concept of achievement their education once promised.

Why educated workers fail to adapt

Experts also caution that college-educated employees may even fare worse when industries contract. Their skills and networks are usually specialty-specific, limiting their ease of shifting into alternative industries. Pessimism can also be a liability: waiting for higher offers by resisting early offers can be a mistake, making would-be hires sit on the shelf as opportunities evaporate. Algorithms in hiring complicate searches, flooding employers with indistinguishable resumes and hiding well-qualified candidates.

What's next

The long-term unemployed now face a technology- and globally reconfigured labour market. Economists are sounding the alarm that unless there is radical adjustment-through retraining, career shifts, and white-collar displacement-policies aimed at fixing the problem, the trend risks consigning ever more educated Americans to permanent sideline status. At least in the short run, the college degree previously a ticket of access to opportunity no longer insures against the risk of long-term unemployment.