New college graduates in North Carolina and across the country are making noise about the difficulties they face while attempting to enter the job market — one that’s been dubbed the grimmest in years. Many of them say they did everything right. They excelled in high school, went to a good college, graduated with one degree or multiple.
So why do members of the class of 2026 feel like they’re being left behind?
It might seem like news of the brutal job market has sidestepped North Carolina given that Raleigh and Charlotte are frequently lauded as some of the best cities for new graduates, but economists say it isn’t so simple. While unemployment is lower in the state than the national rate, hiring has slowed down, starting wages for new graduates are on the decline and it’s getting increasingly difficult for individuals to find entry-level jobs.
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And yes, young college graduates are having a particularly hard time getting work, said Andrew Berger-Gross, senior economist for the North Carolina Department of Commerce.
“We see that for two years in a row North Carolina’s college graduates have seen declining employment rates and declines in their median post college earnings,” he said.
“… There’s a lot of arguments about what is driving this trend, but … it’s undeniable that both nationwide and in North Carolina, effectively there is a labor market recession for recent college graduates.”
‘Working hard isn’t enough’
Michael Ramos, a recent Duke University graduate, is the first in his family to obtain a college degree. While this should be a time to celebrate, the anxiety has only increased since graduating, he said from outside the North Carolina General Assembly during a press conference May 28.
He and his peers often debate which is better — apply to jobs where hundreds vie for one position, pursue further schooling during a time when education is being defunded or accept jobs unrelated to what they studied and the industries they hoped to work in. They have lost faith in what the future holds, he said.
“It’s so much harder to own a home,” he said. “Having kids one day, I thought would be exciting, but actually I’m really scared. It’s very fear-inducing, with rising childcare costs, and climate change has only gotten worse, affecting the spaces that we love and I would hope to see continue.
“The American dream is not what my parents and grandparents had envisioned for me and for themselves, when they first arrived to this country. In fact, I’ve only thought more and more of the famous George Carlin line, ‘It’s called the American dream because you have to be asleep to believe it.’”
Leio Ibarra-Mendez, also a first-generation college student, graduated this year from NC State University with degrees in political science and science, technology and society. He thought graduating meant he had worked hard enough to succeed, but affording gas and grocery prices still proves to be as much of a hurdle as securing a job.
“Last summer, I applied to over 300 jobs with little success,” he said.
“Working hard isn’t enough when we are being forced to get jobs that aren’t somehow hiring, afford apartments that we can’t afford and afford basic needs when everything is rising except our wages. This is an unfortunate reality that many of us are facing across our state and nationally. Just this week, a report found that over 42% of Gen Z say that they are living paycheck to paycheck, with the high cost of living being the main barrier to achieving financial success.
“We get told to move ourselves forward by going to college, however, for our generation, we are being greeted by (Immigration and Customs Enforcement) on our campus, an unstable job market and rising costs.”
For graduates the struggle is real
While North Carolina’s economic state is relatively good compared to the rest of the country, Berger-Gross said this is within the context of a multi-year slowdown of the labor market. The unemployment rate remains low in the state and across the country primarily because there are not mass layoffs, a typical sign of a recession. But every other labor market indicator has slowed.
As for why that’s disproportionately impacting recent college graduates? That’s up for debate.
For one, Berger-Gross and Dora Gicheva, an economics professor at UNC-Greensboro, both pointed to new research that shows the increase in remote work could be having an impact on who employers choose to hire.
“With more remote work, it’s more difficult for employers to train young workers when they’re not in the office, and they argue that this is a reason why hiring rates for young college-educated workers have dropped is because of this added cost of training remote workers,” Gicheva said.
Research also shows employer demand for college-educated graduates is slowing, so while there’s an increasing number of college graduates, employer demand is not growing alongside it. This can be seen in data showing the unemployment rate of recent college graduates versus young people without a college degree is getting closer than it’s been in past years.
And although there’s a looming enrollment cliff, where a drop in the birth rate after 2008 will soon lead to fewer enrolled college students, that doesn’t necessarily mean the playing field will be leveled.
“If employers had a fixed demand for labor, if they hired the same number of people every year, then yes, declining population growth, an aging population, slowing labor force growth, all of this would mean that employers have a harder time filling positions, and that job seekers really can have the pick of whatever job they want,” Berger-Gross said.
“But this decline in labor supply, the slowdown in the growth of the labor force, is happening alongside a slowdown in labor demand, a slowdown in the number of people that companies are actually looking to hire. And when you look at these labor market indicators, it appears that companies are cutting positions faster than the labor force is losing people, so it all kind of depends on the rate at which these trends go.”
While workers aren’t being laid off en masse, companies are still downsizing quietly. Employers have indicated they are primarily reducing their headcounts through attrition, Berger-Gross said. When people quit or retire, they choose not to fill those positions.
“That’s why you have a, frankly, unprecedented situation, where for the last four years in a row you’ve seen job growth slowing, you’ve seen wage growth slowing,” he said.
“Every survey of job seekers out there has people saying ‘it’s harder for me to find a job.’ You probably know job seekers in your life, I know job seekers in my life who tell me it’s getting increasingly hard year by year to find a job, but that’s occurred without mass layoffs.”
Typically companies will both let go of employees and stop hiring at the same time. However, it seems that there was a level of over-hiring after the pandemic, particularly in 2022, that resulted in labor hoarding, Berger-Gross said. Since then, companies have likely been attempting to shed excess employees that weren’t, or no longer are, essential to operations.
There’s a perception that those who pursue liberal arts degrees will naturally have a more difficult time landing a job. There has been more of a demand for STEM-oriented fields historically, but artificial intelligence has also been a disruptive force in that regard, Gicheva said.
“We are seeing impacts, especially for occupations that used to have a lot of job opportunities for recent graduates like computer science, data analytics, job growth in those fields is starting to really drop very quickly again, off from a peak in early 2022, so not that long ago,” she said.
“Maybe even when people were choosing their majors, they saw this big growth in data analytics, computer science, software development, and so they went into these majors, and now we’re starting to see a big decline, and especially the number of entry-level jobs in those fields.”
So while some may point to an increased GDP and say the United States does not technically find itself in a recession, it’d be fair to conclude the perception that graduates like Ramos and Ibarra-Mendez have of the market aligns with reality.
“The only qualifier I’d provide is this is not as bad as, say, the Great Recession of 2007 and 2009 because during that period of time, a lot of people were getting laid off, and you’re not seeing a ton of mass layoffs,” Berger-Gross said.
“But in terms of hiring rates, the rates at which people are actually able to get a job, it is comparable to those previous recessions. So it is definitely, objectively, by every measure we have, a hiring slowdown, and that’s in particular impacting these recent college graduates.”
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