For recent college grads, there are reasons bigger than AI that some are not finding jobs

The popular press is full of stories on the bleak economic outlook of recent college graduates. Journalists are tapping into real fears among students, parents, educators and policymakers about the value of college and the uncertainty of careers. However, there is a tendency among reporters and commentators to focus on the educational and economic disruptions wrought by artificial intelligence. This may be intuitive, but evidence suggests it is largely incorrect. Three findings from recent research run counter to this narrative: - Difficulties facing young college graduates in the labor market predate the widespread adoption of generative AI. - Remote work appears to be a major factor behind the deterioration in employment prospects for young college graduates. - Earning a degree pays off, research shows, despite the rise in stories about the trades, blue-collar work and the supposed irrelevance of a college education. AI is not the problem It’s true that college graduates are facing an increasingly tight labor market. Recent data suggests job postings are down and well below pre-pandemic levels. That last point is key. The weakness in the early-career labor market did not begin with the recent explosion in generative AI. This trend can be traced back to the Great Recession, which ended in mid-2009. There was some evidence of a slow post-recession recovery, but much of that progress was undone by COVID-19. The timeline matters: Employment difficulties facing young college graduates were already evident before generative AI became a major part of the workplace. What, then, is the impact of AI on entry-level hiring? Two recent reports give us reason to be skeptical of claims that AI is driving the decline in entry-level opportunities. First, a 2026 report from career networking firm Handshake shows employers increasingly want AI skills. As of March 2026, more than 10% of active internship postings mentioned AI-related keywords. Meanwhile, the share of full-time postings mentioning AI had nearly doubled year-over-year, reaching 4.2%. Second, and even more encouraging, a report from the Strada Institute for the Future of Work suggests that AI may increase rather than decrease entry-level hiring. Strada surveyed nearly 1,500 executives and senior talent leaders and found that employers were 2.7 times more likely to expect AI to increase entry-level hiring this year as to decrease hiring. This does not mean AI has no effect on entry-level work. It clearly does. Strada found that AI is changing the mix of tasks assigned to entry-level employees, reducing some routine and administrative work while increasing analytical and judgment-based responsibilities. But there is a distinction between AI changing entry-level jobs and AI causing the collapse of entry-level hiring. The available evidence points strongly toward the former. So if AI isn’t the primary cause of the recent downturn in entry-level employment, what else might be driving it? Remote work may be one of the most important factors. Remote work as a barrier to entry-level employment A June 2026 analysis from the Federal Reserve Bank of New York comparing pre-pandemic to post-pandemic unemployment rates shows that the unemployment rate of young graduates has increased relative to older workers in jobs that economists define as “remotable.” Given the timing of the increase in remote work and unemployment among recent graduates, the New York Fed researchers conclude that remote work, rather than generative AI, explains much of the recent rise in young people’s unemployment rates. Why would remote work have such a large effect on young workers? The researchers argue that the four-fold increase in remote work since the pandemic has made it more difficult for employers to train and mentor inexperienced workers. They suggest this may limit the human capital young workers can build. The New York Fed researchers find that workers who were physically closer to colleagues received more feedback and mentorship, and that the loss of feedback was particularly pronounced for younger workers. While economists might be inclined to focus on human capital, socialization may be equally important. The risks of hiring entry-level remote workers are obvious — employers cannot be certain these new employees will know the proper etiquette for communicating with managers, collaborating with colleagues, solving problems or understanding workplace norms. Teaching workplace etiquette remotely poses logistical and cultural challenges. Socialization, rather than strict human capital accumulation, would explain why older employees may generally have an easier time finding remote jobs than younger employees. In-person work is known to have the opposite problem: age discrimination against older workers. The way forward With remote work and AI reshaping entry-level employment, many commentators argue that the answer is to skip college altogether — that higher education can no longer justify its high sticker price and uncertain labor-market prospects. That would be a mistake. The relevant question is whether earning a degree improves students’ economic prospects. The research overwhelmingly suggests it does. Still, college completion remains a major challenge. Financial returns vary substantially by institution, field of study and student. But abandoning college as a response to the difficulties of today’s entry-level labor market would discard this important source of economic mobility. The better response is to change what students do while they are in college, and the Strada report offers a useful guide. When employers rate the skills they want from entry-level college graduates, critical thinking, communication and collaboration rank among the most important. These are all liberal arts competencies that most college graduates should develop. In my recent work, I show that despite popular narratives exalting technical and applied degrees such as business and engineering, most college graduates draw on liberal arts competencies in their entry-level work, aligning with Strada’s survey of employers. A liberal arts education can help students develop the capabilities needed to be effective in the contemporary workplace. These include AI competencies, which are less about coding and more about knowing what kind of prompts to feed AI, how to tweak the output, and how to combine personal expertise with machine-learning. Another important piece for college graduates is accumulating work experience. Strada found that work experience was the strongest indicator of career readiness among the factors it examined. This finding has important implications for colleges and students. Journalists covering higher education should know this too: If employers are reluctant to hire inexperienced workers into remote positions, students need opportunities to acquire meaningful workplace experience before graduation. Internships, co-ops, project-based learning and other forms of work-based learning can provide that experience. These also give students opportunities to develop the communication, collaboration and workplace skills that employers say they value. Students who graduate with a liberal arts education and meaningful work experience are better positioned to demonstrate that they can contribute in a modern workplace — whether that workplace is remote, hybrid or fully in person. The entry-level labor market is at a crossroads. But evidence suggests that the problem is not simply that AI is eliminating jobs for recent college graduates. The more complicated story is that the nature of entry-level work is changing. AI is altering the tasks workers perform, while remote work is making it harder for employers to train and mentor inexperienced employees. And employers continue to value early-career candidates with foundational skills such as critical thinking and communication, as well as those who have spent time in a workplace. That points toward a relatively straightforward response. Higher education institutions should give students opportunities to develop liberal arts skills and practical workplace experience. Doing so would not eliminate the uncertainty that today’s graduates face. But it would address some of the underlying tensions that have made the transition from college to work increasingly difficult. News reporters, for their part, should ask university officials whether they are preparing students for the workforce in a way that is informed by this recent evidence. Expert Commentary