42% of Recent U.S. College Grads Were Underemployed in June, New York Fed Data Shows

Four in 10 recent college graduates are working jobs that never required the diploma.

The Federal Reserve Bank of New York's tracker of the labor market for recent graduates put underemployment among 22-to-27-year-olds with a bachelor's degree at about 42% in June. That is up from 41.8% in May, down from 42.4% in November 2025, and below the pandemic-era high of 43.4% in October 2020.

Underemployment here means working in a job that typically does not call for a bachelor's degree.

Graduates now trail the average worker

The jobless rate for recent grads hit 5.7% in June. The rate for all workers was 4.1%.

That is a reversal of the old pattern. From 1990, when the New York Fed's data begins, through 2018, recent grads had a higher unemployment rate than the average worker in just eight months. They have been higher every month since January 2021.

The gap reached a record 1.8 percentage points in April 2025 and remains near that level. The New York Fed also reported a recent-grad unemployment rate of about 5.6% for the second quarter of 2026, with underemployment around 42%.

What you majored in matters

The New York Fed's breakdown by major, using 2024 Census data, shows wide differences.

Underemployment was highest for criminal justice majors at 65.8%, performing arts at 63.9% and fine arts at 58.9%.

Unemployment told a different story. Computer engineering had the second-worst jobless rate of any major at 7.8%, and computer science the fourth-worst at 7%. Special education majors had a 0.7% jobless rate, elementary education 1.2% and nursing 2.1%.

The fields that stand out for low unemployment are ones with direct, licensed or in-demand job pipelines. The fields with the worst underemployment are not.

More degrees, same number of good jobs

Census data show about 35.7% of Americans 25 and older held at least a bachelor's degree in 2024, up from 24.4% in 2000 and 6.2% in 1950. Among adults 25 to 39, the share is above 42%.

One analysis of the figures argues the problem is not that the country has too many educated people. Its claim is that the economy may be producing more workers trained for white-collar careers than there are attractive entry-level openings, while many occupations that keep the economy running struggle to recruit.

That analysis also points to credential inflation. When employers get hundreds of applications, requiring a bachelor's degree is an easy way to shrink the pile, even if the job could be done by someone with vocational training or experience.

It cautions against reading 42% as 42% of graduates wasting their education. Careers change, people move between industries, and some jobs without formal degree requirements pay well and offer advancement.

Still, the arithmetic is hard on borrowers. Young workers carrying tuition costs and student debt are competing for jobs that don't require the credentials they paid for.

Turchin's warning

Peter Turchin, professor emeritus at the University of Connecticut and project leader at the Complexity Science Hub in Vienna, calls this "elite overproduction." His theory holds that when a society produces more people aspiring to elite status than it has elite positions, the frustrated surplus turns on the system.

In his reading of history, it is one of three pressures that build before a crack-up, alongside falling living standards for ordinary people and governments that can't pay their bills. Fortune cites the U.S. national debt at a record $40 trillion in that context.

Turchin has argued the U.S. has reached a point seen repeatedly in past civilizations, and that what follows is "a wave of prolonged and intense sociopolitical instability." He told Fortune last year that high recent-grad unemployment shows the value of a diploma "actually declines."

That is Turchin's theory, not an established finding. The New York Fed's numbers measure jobs, not unrest.

Protests abroad

Fortune ties Turchin's idea to youth protests overseas. In September 2025, Nepal banned 26 social platforms. Protesters burned government buildings and politicians' homes, and Prime Minister Khadga Prasad Sharma Oli resigned. At least 76 people were killed, and Nepal's youth unemployment rate was about 21%, according to Fortune.

In France, school students have been walking out of class since mid-September over a shortage of teachers, overcrowded classrooms and Parcoursup, the platform that decides university admissions. On Oct. 17, the Interior Ministry reported 550,000 protest participants. By that time, the demonstrations had also broadened to include cost-of-living demands, and some cities saw violence.

The stated triggers differ from the U.S. data. Nepal's was a social media ban. France's was school conditions and admissions. No source has shown that graduate underemployment drove either movement, and the American picture, a 5.7% jobless rate for grads, is far from Nepal's youth unemployment.

What the numbers do show

The college premium is not gone. Most of the data still shows degrees paying off for millions of people. But the entry point has gotten harder, and the choice of major carries real weight: nursing and education grads are finding work, while criminal justice and arts grads are mostly not finding degree-level jobs.

The open question is whether the June reading is a plateau or a turn. Underemployment has eased from its November 2025 level of 42.4%, while the unemployment gap with all workers remains near its April 2025 record of 1.8 points. The next monthly update from the New York Fed will show which way it is moving.