Federal Reserve data shows diminished higher education payoff

Gen Z is facing mounting challenges breaking into the entry-level job market, and new Federal Reserve data shows young male college graduates may be hurting the most. The latest data reveals that unemployment among recent college graduates has climbed to about 5.5%. While that figure is still below the 6.9% unemployment rate among all young workers aged 22 to 27, men with degrees are now experiencing joblessness at nearly the same level as those without one.

Federal Reserve

According to an analysis of U.S. Current Population Survey data by the Financial Times, the once clear advantage of higher education has nearly disappeared. In 2010, men without college degrees faced unemployment rates above 15%, while male graduates were closer to 7%. Today, both groups are nearly indistinguishable in terms of job prospects. The analysis highlights how the labor market boost once guaranteed by a diploma is fading, as employers place less emphasis on credentials when filling entry-level roles. Among college-educated men, unemployment is about 7%, compared with roughly 4% for women. Growth in female-dominated sectors such as health care plays a key role in that gap.

Job openings

Over the next decade, health care occupations are projected to expand at a much faster pace than other industries, adding an estimated 1.9 million openings each year, according to the U.S. Bureau of Labor Statistics. The field is also considered one of the most stable, regardless of economic conditions. “Health care is a classic recession-resistant industry because medical care is always in demand,” Priya Rathod, career expert at Indeed, previously told Fortune. Another factor comes down to job flexibility. “Women tend to be more flexible in accepting job offers, even if they’re not perfectly aligned with their career goals or are part-time or they are overqualified for,” said Lewis Maleh, CEO of global recruitment agency Bentley Lewis. “Men, on the other hand, often hold out for roles that align more closely with their ideal career path or offer what they perceive as adequate compensation and status.” These dynamics contribute to a growing sense of frustration among young workers. Roughly 11% of all young people are now classified as NEET — meaning not in employment, education or training. For many, especially men, months or even years of unsuccessful job searching can lead to disillusionment and withdrawal from the labor force.

Federal research

Meanwhile, college enrollment has fallen sharply, particularly among men. Pew Research Center analysis shows the number of young students declined by about 1.2 million between 2011 and 2022. That drop included about 1 million fewer male students compared with 200,000 fewer female students. A growing share of men are instead pursuing skilled trades. Enrollment in two-year vocational schools has surged about 20% since 2020, a net increase of more than 850,000 students, according to the National Student Clearinghouse Research Center.

Trade careers

Even business leaders see opportunity in this shift. Daniel Lubetzky, founder of KIND bars and a new judge on Shark Tank, argues that trade careers could shape the future. “Vocational training and learning how to be a carpenter or a mechanic or any of those jobs is a huge field with huge opportunities that pays really, really well,” Lubetzky told outlets. “For those people that have great ideas or great opportunities and don’t want to go to college, I don’t think college is an end-all, be-all or required thing.”

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