AI Didn't Take Every Job. It Took the One You Were Going to Start In.
Something happened to college graduates this year that has never happened before.
Since at least 1990, finishing a degree made you less likely to be unemployed than the average American worker. Every year. Through two recessions and a pandemic. That is how far back the Federal Reserve Bank of New York keeps the numbers.
This year it flipped. New graduates are now out of work at a higher rate than everyone else.
And the part that makes no sense at first: employers say they are hiring more graduates, not fewer.
Employers say they are hiring more, not less
NACE tracks campus hiring. Companies and college career centers both belong to it, so when NACE asks, employers answer. In its spring survey, they said they would hire 5.6% more graduates this year than last.
Big companies said more. Firms with over 5,000 staff put their number at 8.7%.
That is a jump. The same survey in the fall said 1.6%, which most people read as flat.
Shawn VanDerziel runs NACE.
The hiring increase we are reporting in NACE's Job Outlook 2026 Spring Update follows two years of lackluster job markets for new college graduates as well as earlier projections for this year's class that indicated a flat job market.
One thing to keep in mind. The most common answer employers gave about the market was fair. Not good. Fair, picked by 45% of them.
Evan Anderson has two degrees and no job
Evan Anderson finished his MBA in December 2024. Before that he studied sports management at Ohio Dominican University. By this summer he had applied for 150 to 200 jobs.
I feel like I'm failing.
He is 27. He told Spectrum News 1 in June that the whole thing is depressing, and that the odds and ends do not add up.
Tom Johnston was on the same broadcast. He runs a hiring firm, Synova Talent Solutions, and he thinks the method is the problem.
The job board thing doesn't work. It never really did. People hire people, not resumes.
The drop is in one place, not everywhere
A team at Stanford went looking for AI's fingerprints. They did not run a survey. They read real payroll records from ADP, covering millions of American workers.
Their paper is called Canaries in the Coal Mine. Erik Brynjolfsson, Bharat Chandar and Ruyu Chen wrote it.
Some fields where AI does a lot of the work, like software and customer service, employment for 22 to 25 year olds fell 13%. In those same fields, older workers were fine. In fields AI barely touches, everyone was fine.
So it is not the degree. It is the first rung, in certain fields.
Their explanation is simple. AI is good at the kind of knowledge you get from school. It is bad at the kind you get from doing a job for five years. A new graduate has the first one and not the second.
Put the three sets of numbers next to each other and the year stops looking contradictory.
What was measured | Who measured it | Result |
|---|---|---|
Jobs for 22 to 25 year olds in AI-heavy fields | Stanford, using payroll records | down 13% |
Older workers in those same jobs | Stanford, using payroll records | no drop |
Unemployment, new graduates | New York Fed | 5.6% |
Unemployment, everyone else | New York Fed | 4.2% |
What employers say they will hire this year | NACE | up 5.6% |
The market did not crash. It split. And the half that broke is the half you were going to start in.
What bosses say is not what payrolls show
One number went everywhere this summer. Nearly half of hiring managers, 48%, said they would rather spend money on AI tools than hire and train a new graduate.
That came from a survey of 1,000 managers released on 17 July. It was paid for by ResumeTemplates.com, a company that sells resume templates.
It measures what managers say they will do. The Stanford number measures what companies already did. Those are two different things, and this summer they pointed in opposite directions.
If you are picking a major right now
Three things hold up whatever happens next.
Look at the job, not the average. A computer science degree is not a bad degree. But the first rung in software has thinned, while nursing, the trades and any job you have to show up for in person have not.
Experience is the scarce thing now. The Fed says 42% of employed recent graduates are in jobs that never asked for a degree. An internship, a co-op, or one project you built and can explain answers the question your diploma no longer answers by itself.
The channel everyone uses is full. Anderson sent 150 to 200 applications through it. That is the loop Johnston was pointing at.
The class graduating next spring walks into a market where the average is up and the bottom rung is missing in some fields. Both halves are true. Most of the coverage this month carried only one.
