AI and the Death of the Career Ladder

For decades, a clear promise defined the aspirations of young adults worldwide. If you went to university, even if you accumulated some debt, you got a ticket to the middle class. That ticket guaranteed a white collar job and a salary premium over non-graduates. It also paved the way to home ownership.

That promise has been broken. The golden ticket turned out to just be a coupon for 10% off of a student loan. We're witnessing a rare economic shift. A growing economy usually rewards the effort taken to get an education.

Yet today, the economy has been expanding while the door for graduate employment has been closing. In May 2024, Oxford Economics reported a statistic that defines this new era. For the first time in 45 years, the unemployment rate for recent graduates in the United States exceeded the national average. Now, while this isn't great, it's by no means a disaster either, as US unemployment, while rising, is still hovering near all-time lows.

This inversion is partially a story of supply. In 1960, only about 5% of young people in the UK went to university. By 2007, that figure had risen to 43%. The United States saw a similar trajectory with the share of adults holding a degree jumping from 7.7% in 1960 to nearly 38% in 2023.

The degree, which was once a rare signal of elite capability, has become a baseline expectation. As scarcity disappeared, so did the pay premium. It's not just the number of graduates that have been growing either. There's been grade inflation too.

In the UK, for example, the proportion of students awarded a first class degree went from 7% in the mid90s to 26% today. The problem with grade inflation like this is that if everyone is special, no one is. In September 2025, unemployment amongst 20 to 24 year olds in the United States hit 9.2. 2% rising sharply from 7% a year earlier.

Broader data from Bloomberg reveals that Americans with four-year degrees now account for more than 25% of all unemployed workers. This ratio has climbed to an all-time high, surpassing even the temporary peak reached during the pandemic layoffs of March 2020. The crisis can be seen in the frantic activity required to just stand still. According to Highf Flyers research, final year students in the UK now make an average of 21.7 job applications each.

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