The Challenges of Fresh Graduates in the Global Job Market

Fresh university graduates are typically seen as having better positions in the labor market compared to the general workforce. Yet, over the last decade, rising competition—both from fellow job seekers and rapid technological adoption—has made it increasingly difficult for them to secure jobs, especially amid high unemployment rates.

Even the United States (US), with its massive and dynamic economy, is not immune to this issue. While its labor market is strong, it is often more quickly impacted by global trends such as technological progress or disruptions caused by crises.

From the 1990s through much of the 2010s, fresh graduates in the US consistently had lower unemployment rates compared to the national average. However, this pattern shifted during the COVID-19 pandemic, when unemployment among new graduates temporarily surpassed overall national unemployment.

Today, advancements in technology and the rise of artificial intelligence (AI) have intensified this pattern. According to data from the Federal Reserve Bank of New York as of June 2025, the unemployment rate for fresh graduates aged 22–27 now stands at 4.8%, higher than the national average of 4.0%.

Why Did Fresh Graduates Used to Perform Better?

In the 1990s through the 2008 global financial crisis, new graduates almost always had lower unemployment rates. The gap between national unemployment and graduate unemployment averaged about 1.7%. For instance, in 2008, while overall unemployment reached 4.7%, fresh graduates recorded only 3.6%.

This was because employers often preferred graduates who possessed formal degrees, were considered competent, flexible, easier to train, and willing to accept lower salaries than experienced workers—making them attractive hires even during downturns.

But after the pandemic, the situation reversed. Despite the recovery of the US economy, AI adoption has further reduced job prospects for inexperienced graduates. While some jobs are less vulnerable to automation, graduates still need to adapt swiftly to technological changes reshaping business demands.

Rising Graduate Unemployment in Indonesia

A similar challenge exists in Indonesia. Data from the Central Statistics Agency (BPS) shows the number of unemployed degree holders was 495,143 in 2014, skyrocketing to 981,203 in 2020. Although it dropped slightly to 842,378 in 2024, the figure remains significant.

The sharpest spike occurred during the COVID-19 pandemic, when hiring froze, workplaces collapsed, and many graduates had to start their careers amid a global crisis. But the root of the problem extends beyond the pandemic.

High school graduates still dominate unemployment numbers, with 2.51 million recorded in 2023. However, they are generally more flexible, quickly absorbed into informal sectors or technical jobs that require fewer credentials.

Graduates, on the other hand, often face an aspirational mismatch—a gap between their ambitions, expectations, and reality. Many are unwilling to accept jobs outside their field of study or perceived prestige and instead choose to wait longer.

There is also the reservation wage gap, where graduates set salary or position expectations that the market cannot meet. As a result, they remain unemployed longer, contributing to rising figures.

The core issue is not merely the availability of jobs but a mismatch in skills. University curricula often fail to align with labor market needs, industry–campus connections remain weak, and entrepreneurial culture among students is underdeveloped.

The Way Forward

Addressing this crisis requires reforms at the root. Higher education must be redesigned to emphasize practical skills, digital literacy, teamwork, and stronger internship and industry partnerships. Equally important, students must be equipped with an entrepreneurial mindset, not just a job-seeking mentality.

The fact that a degree no longer guarantees employment should be seen as a call for transformation. If higher education adapts and graduates learn to bridge their ambitions with reality, graduate unemployment can be reduced.

Indonesia is not short of talent. What it needs is a more relevant education system, an inclusive work ecosystem, and the courage to redefine what true success after graduation means.