42% of Young US Grads Work Jobs That Don't Need a Degree

About 42% of America's recent college graduates were underemployed in June, working jobs that don't require a bachelor's degree, according to the Federal Reserve Bank of New York's labor market tracker for recent grads. The share rose from 41.8% in May, sat below 42.4% in November 2025, and stayed under the pandemic-era high of 43.4% hit in October 2020.

Unemployment tells the second half of the story. Recent grads' jobless rate reached 5.7% in June, against 4.1% for all workers. That's a historic reversal. From 1990, when the Fed's data begins, through 2018, recent grads were more likely to be unemployed than the average worker in just eight months. Every month since January 2021 they have been. The gap hit a record 1.8 percentage points in April 2025 and remains near it.

Which majors get hit hardest?

The Fed's breakdown by college major, using 2024 Census data, shows criminal justice leading underemployment at 65.8%, followed by performing arts at 63.9% and fine arts at 58.9%. On unemployment, computer engineering ranked second-worst among majors at 7.8%, with computer science fourth at 7%. Education majors fared best: special education posted a 0.7% jobless rate, elementary education 1.2% and nursing 2.1%.

Peter Turchin, professor emeritus at the University of Connecticut and project leader at the Complexity Science Hub in Vienna, calls the pattern "elite overproduction." When a society produces more aspirants to elite status than it has elite positions, the frustrated surplus turns on the system. He ranks it among three pressures that precede a crack-up, alongside falling living standards for ordinary people and governments that can't pay their bills. The U.S. national debt has climbed to a record $40 trillion.

In his telling, what follows is "a wave of prolonged and intense sociopolitical instability." Asked by Fortune last year where he saw the pattern in daily life, Turchin said: "It's actually everywhere you look. Look at the overproduction of university degrees." He cited high recent-graduate unemployment as evidence that a diploma's value "actually declines," and pointed to the crowded airport lounge as a symbol of an upper middle class with too many members. "The overproduction of lower-ranking elites results in decreased benefits for all," he said.

What happens when the young hit the streets?

In September 2025, Nepal banned 26 social media platforms. Within days, young protesters set government buildings and politicians' homes on fire; at least 76 people died and Prime Minister K.P. Sharma Oli resigned. The fuel was the "Nepo Kids" backlash against politicians' children flaunting luxury online in a country with roughly 21% youth unemployment.

In India this May, Chief Justice Surya Kant likened some activists and unemployed young people to "cockroaches" and "parasites of society," later saying he meant people with fraudulent degrees. The next day Abhijeet Dipke, a 30-year-old Boston University graduate, posted on X: "What if all cockroaches came together?" The joke became the Cockroach Janta Party, a parody of Prime Minister Narendra Modi's BJP, then a protest movement targeting leaks in national exams, including the test that sorts India's future doctors. Education Minister Dharmendra Pradhan resigned in July.

French high schoolers have walked out since mid-September over teacher shortages, classes sometimes topping 40 students, and Parcoursup, the platform that allocates university places. By October, roughly a third of France's 3,700 lycées had been disrupted. On Oct. 17 the Interior Ministry counted 550,000 people in the streets as protests turned to the cost of living and turned violent in several cities. Unrest has spread to Belgium, Albania, Greece and Italy. Students demand 250,000 more university places; Higher Education Minister Philippe Baptiste called scrapping Parcoursup "pure demagogy." France's public debt is projected to reach 121.7% of GDP next year.

Is America becoming Italy?

Rana Foroohar argued in the Financial Times this month that America is starting to look like Italy, where "older people are holding on to good jobs, and the young have trouble finding decent ones." September's U.S. jobs report put unemployment at 7.1% for workers aged 20 to 24, versus 3.6% for those 25 to 54 and 3% for those over 55. Italy's youth unemployment runs near 20%, but the ratio matters: in both countries, young workers' unemployment is roughly double the middle-aged rate.

Foroohar also argued AI favors experienced workers while squeezing entry-level jobs. She cited a Census Bureau paper from September finding that graduates in the most AI-exposed fields faced a 5-percentage-point drop in the odds of landing a first job and 13% lower earnings.

Underemployment for new grads isn't new. "It's been around 40% historically, going up and down within about 10 percentage points," Andrew Hanson, senior director at the Strada Education Foundation, told PolitiFact. In the Fed's data the rate has run between roughly 38% and 47% since 2008. What's changed is the payoff: when a degree guaranteed a lower jobless rate, tending bar after graduation was a detour. Nepal, India and France have shown what happens when enough young people decide the sorting is rigged.