Degrees Without Jobs: How AI and Economics Are Reshaping Careers

discouraged young person looking for a job

Recent college graduates, particularly those with degrees in computer science and programming, are finding it increasingly challenging to secure employment. This is not a U.S.‑only problem—it is a global phenomenon that includes countries like China and India. Artificial intelligence is certainly a factor, but it is not acting alone. Broader structural shifts in hiring practices, economic headwinds like tariffs and inflation, and an oversupply of credentialed workers are all playing critical roles.

Artificial intelligence has begun automating tasks traditionally performed by entry‑level employees. In tech, coding, documentation, and routine support work are now increasingly handled by tools like GitHub Copilot, ChatGPT, and other AI assistants. Companies such as Microsoft and Alphabet reportedly rely on AI to generate a substantial part of their code. Forecasts suggest that as many as half of all entry‑level tech roles could be displaced by AI over the next five years. Job postings for entry-level roles in tech, finance, and consulting have dropped sharply since 2023, and many employers now prefer experienced candidates or AI over fresh graduates.

In the U.S., the so‑called “computer‑science bubble” may be deflating. Enrollment gains have stalled, and so have job prospects. Even graduates from top universities are struggling to land tech jobs: some report being offered interviews only from fast‑food chains. Anecdotes abound of qualified candidates ending up in non‑technical roles—one graduate now works at Chipotle because AI tools have hollowed out the entry‑level coding job pipeline.

But AI is not the only culprit. Structural changes in the labor market are also at play. A recent study by Oxford Economics found that tech hiring is shifting: there was a post-pandemic surge in demand, but now there is a normalization, a slowdown, and increased automation, especially in entry-level roles. The Financial Times reported that entry-level job postings in the U.S. and U.K. have declined by 43 percent and 63 percent, respectively, since June 2022. While AI receives much of the blame, factors such as government spending cuts, inflation, rising employment costs, and outsourcing are also major contributors.

Tariffs and inflation have added pressure, especially in China’s manufacturing sector. Factories are cutting shifts, trimming wages, and relying more on temporary labor in response to U.S. tariffs. This creates ripple effects: fewer workers mean lower consumer spending, further weakening the job market.

As I have written about before, there are more qualified people than there are jobs. Across the world, the supply of educated workers is rising faster than demand. Degree inflation means more graduates chasing fewer quality jobs. China, in particular, faces massive graduate unemployment, especially in oversupplied fields such as computer science.

So, is it simply that there are too many people chasing too few jobs? In part, yes. Credential inflation means employers face a glut of degree holders, many of whom lack practical experience. Entry‑level jobs that once served as training grounds for new workers are evaporating. Both automation and shifting hiring standards exacerbate this trend.

Yet there is hope. AI not only substitutes for human work but also complements it. There is a growing demand for skills that complement AI, such as digital literacy, teamwork, resilience, and ethics. Wages for workers who combine technical AI knowledge with human skills are rising. A UK study reveals that, from 2018 to mid-2024, demand for AI-related skills doubled, even as employers placed less emphasis on formal degrees. Skills now carry more wage premium than degrees.

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Looking ahead, it is unlikely that the current difficulties are solely temporary. Structural changes, including credential inflation, AI automation, rising costs, and shifts in hiring practices, are all reshaping the landscape.

Students should focus on developing transferable skills and hands-on expertise, alongside proficiency in AI literacy. Employers can support this by providing training, mentorship, and hiring models that value potential as much as credentials. Governments can ease uncertainty by offering stable policy environments and investing in workforce development.

The future job market will not return to pre-AI norms for fresh graduates. Instead, entry-level roles will evolve to emphasize human-AI collaboration, real-world problem-solving, adaptability, and ethical reasoning. Those who combine technical skill with creativity, passion, and emotional intelligence—those who understand AI and can guide it rather than compete with it—will be most resilient.

New college graduates are facing a complex mix of AI disruption, economic headwinds, structural shifts, and oversupply. It is not only AI, nor inflation or tariffs, nor too many graduates, but all of these factors working together. The path forward lies in adaptation, skill diversification, and systems that prioritize potential over credentials. Those who can navigate this new ecosystem may find not just jobs, but opportunities.