Gen Z Faces Tough Job Market as Oversupply of College Graduates Collides with Economic Headwinds
NEW YORK – September 21, 2025 – A challenging job market is confronting Generation Z, but the narrative of artificial intelligence solely to blame may be incomplete. A confluence of factors – including a surge in college graduates, lingering economic uncertainties stemming from past tariffs, and a shifting perception of higher education’s value – are contributing to the difficulties young workers face finding employment, according to economists and recent data.
For years, a college degree was widely considered essential for career success. Though, that equation is being reevaluated as the job landscape evolves.A recent Gallup Poll reveals a dramatic decline in the perceived importance of a four-year degree, with only 35% of Americans now considering it “vrey significant,” a record low-down from 51% in 2019 and 75% in 2010.This shift coincides with a growing interest in trade jobs, particularly among Gen Z, who are drawn to careers offering stability and less vulnerability to automation.
The economic backdrop further complicates the situation. president Donald Trump’s tariffs, implemented in prior years, continue to contribute to inflation and economic uncertainty, hindering business planning and expansion, explained economist Ed Yardeni. Together, a National bureau of Economic Research paper suggests AI may be flattening organizational structures, empowering lower-level employees with technology and reducing the need for extensive middle management – a dynamic not necessarily detrimental to overall employment.
skepticism about AI’s disproportionate impact on Gen Z employment is also growing. UBS chief economist Paul Donovan points to the contrasting experiences of young workers in other developed nations. Unemployment rates among young workers in the eurozone are at record lows, the U.K. has seen a steady decline,and labor participation in Japan is near all-time highs,leading him to state,”It seems highly implausible that AI uniquely hurts the employment prospects of younger US workers.”
Adding to the pressure, the student debt crisis is making young people more hesitant to invest in degrees with uncertain returns. This combination of factors suggests the Gen Z job crisis is not simply a technological disruption, but a complex interplay of economic forces and evolving societal values.
