The new graduate reality: Do degrees still open doors in the modern workforce?

For the generations before us, the path to adult life seemed relatively straightforward: attend university, secure a job afterwards, and gradually achieve financial stability. However, in today’s job market, university degrees no longer seem to carry the same prestige or guarantees that they used to 20 years ago, leaving many recent graduates unemployed and uncertain about their future.

Over the past few years, the number of job vacancies in the UK has suffered a steep decline. The Office for National Statistics (ONS) revealed that the number of jobs on offer reached a staggeringly low 781,000 in the early months of 2025. Research data from job search websites suggests that the general decline in job vacancies has coincided with an even harsher reduction in job listings open to recent graduates. Therefore, although most UK students find jobs not long after leaving university, many of them struggle to find roles aligned with their qualifications; the Office for National Statistics estimated that just 60.4% of graduates living in England aged 21-30 were in “high-skilled” work, while 5.5% were unemployed and 26.4% in low-skilled jobs.

To make matters worse, the “graduate wage premium” that older generations once enjoyed has been shrinking. In May of this year, the Financial Times reported that female graduates aged 21 to 30 earned just 23% more than the national average, a significant drop from 40% in 2013. The gap for male graduates also narrowed.

A recent report by Matthew Martin, a senior economist at Oxford Economics, revealed that, in the United States, the unemployment rate of recent graduates has surpassed that of the general public, marking an unprecedented development

Even students who graduated with a first-class degree from prestigious universities such as Oxford and Cambridge have suffered the effects of the lack of job opportunities. At a time when there are clear alternatives to attending university, such as apprenticeships or entering the workforce directly, students from these prestigious universities are becoming increasingly aware of the diminished value of their degrees. Harry, a History student studying at Oxford University, expressed his scepticism about the practical value of his degree, saying, “I feel like most of the degrees here, unless you’re interested in staying in academia, really aren’t that useful in terms of your long-term career prospects”.

This trend is not just limited to the UK and Europe. A recent report by Matthew Martin, a senior economist at Oxford Economics, revealed that, in the United States, the unemployment rate of recent graduates has surpassed that of the general public, marking an unprecedented development.

So why are graduates losing their privileges? Several experts in the field have pointed to degree inflation and oversupply. Degrees generally serve as a stamp of approval, signalling to potential employers that a specific job applicant possesses desirable skills for that particular job. Over the past few decades, there has been a sharp increase in the number of people graduating from higher education institutions. In 1940, there were 4.2 million graduates in the US, whereas now that number is closer to 105 million. Similarly, many jobs that previously only required a secondary school education now only accept university graduates, establishing university degrees as the unofficial standard for educational requirements.

The evolution of the labour market, driven by pressures of automation, oversupply, and shifting employer expectations, calls for students and policymakers alike to reassess the role of higher education

Another contributing factor to the devaluation of university degrees is the rapid advancement of Artificial Intelligence capabilities. Oxford Economics recently found that graduate unemployment is particularly prevalent in sectors such as finance and computer science, where AI has been making major strides. “There are signs that entry-level positions are being displaced by artificial intelligence.”

Employers in these sectors are increasingly using AI to automate tasks that would traditionally be completed by newly graduated employees. What’s more, interviews with firms suggest that employers are removing job postings for entry-level graduate positions. More specifically, a report conducted by The New York Times revealed that tech companies are no longer hiring software engineers with less than three years of experience, as those lower-level tasks can be completed by AI coding tools.

The evolution of the labour market, driven by pressures of automation, oversupply, and shifting employer expectations, calls for students and policymakers alike to reassess the role of higher education. It has become increasingly clear that degrees no longer hold the same value they once did, nor do they offer the employment guarantees they once provided. This shows that credentials aren’t everything; what matters in today’s job market are marketable skills, and if students hope to thrive in a modern employment world flooded with degrees, they must embrace this reality.