The
Newest Face of Long-Term Unemployment? The College Educated.
For
years, only a small portion of the people experiencing long spells of
joblessness were college graduates. That’s starting to change.
Noam
Scheiber
By Noam
Scheiber
Published
Sept. 15, 2025
Updated
Sept. 16, 2025
Sean
Wittmeyer would seem to be highly employable. He has more than a decade of
experience in architecture and product design, impressive coding chops and two
master’s degrees. His skills make him an asset in two industries, technology
and construction, which helped power the economy’s growth over the last 15
years.
But
construction activity has faltered since 2023, after the Federal Reserve began
raising interest rates, and many tech companies began layoffs around the same
time.
That
helps explain why Mr. Wittmeyer, 37, has been unemployed for a year and a half,
since he lost his job in business development for a company that makes software
to help with real estate projects. He has been so eager to earn income that he
has applied for positions befitting an intern, only to be told he was
overqualified. “I can’t even work at the little board game store down the
street,” he said.
When the
federal government released its August employment numbers on Sept. 5, the
overall unemployment rate was still relatively low, at just over 4 percent. But
underneath was a concerning statistic: The portion of unemployed people who
have been out of work for more than six months, which is considered
“long-term,” rose to its highest share in over three years — to nearly 26
percent.
The trend
has alarmed some job-market watchers. “Such an increase is unprecedented
outside of recessions,” said an economist at the Federal Reserve Bank of
Richmond, alluding to a steady worsening of the long-term unemployment rate.
Economists at Goldman Sachs recently expressed concern that a collapse in the
number of job openings “risks locking out” those who are already unemployed.
But just
as surprising as the rise in long-term unemployment is the subset of workers
who are increasingly driving it: the college educated. The fraction of
long-term unemployed people with a college degree has grown from about
one-fifth a decade ago to about one-third today, according to government data
compiled by Matthew Notowidigdo and Jingzhou Huang of the University of
Chicago. The problem has worsened over the past year or two after easing
temporarily.
More of
the College Educated Are Unemployed Longer
The share
of long-term unemployed workers with college degrees has been steadily rising.
Economists
cite a number of reasons for this trend. There are simply more college
graduates today than there were 10 years ago, and the job market for people
without college degrees improved, reducing their share of long-term unemployed.
But
employers also appear to have less need for college-educated workers, driven by
technological change, automation and, most recently, President Trump’s cuts to
federal workers and funding, which have disproportionately affected the college
educated.
“The data
is signaling that there’s some restructuring going on,” said Andreas Mueller,
an expert on long-term unemployment at the University of Zurich. “People are
losing jobs and can’t find jobs in high-skilled occupations.”
Any bout
of unemployment can be traumatic, but the psychological and financial toll of
long-term joblessness tends to be especially serious. More than 200 people
responded to a New York Times questionnaire about being unemployed for longer
than six months, and many mentioned depression or anxiety. A few alluded to
thoughts of suicide.
“I have
checked all the boxes of ‘success’ my entire life: went to college, got a
degree, worked toward a career,” wrote Katie Gallagher, a former sales and
marketing director in Portland, Ore. She has been out of work for almost a year
and estimated that she had applied to more than 3,000 jobs.
“The
stress of rejection is unbearable, along with the looming threat of financial
insecurity,” Ms. Gallagher, 34, continued. “I have never felt depression like
this before in my life.”
In an
interview, Ms. Gallagher said she had $6,000 in credit card debt and was
relying on supplemental nutrition assistance. She said she recently borrowed
about $4,000 from her brother to enroll in a course on A.I. automation and
started a business that helps other firms automate functions like sales and
on-boarding customers.
Employers’
need for college-educated workers appears to have slowed during the past decade
or two, according to several studies by economists. Even before ChatGPT was
released, applications like accounting software and earlier forms of artificial
intelligence used in fields like finance and merchandise planning rendered some
skilled workers obsolete. Data from Indeed, the job-seeking platform, shows
that the portion of job advertisements requiring a college degree has dropped
about 6 percent since 2019.
“There
were big advances in A.I. starting around 2016,” said Lawrence Katz, a labor
economist at Harvard.
The rapid
development of artificial intelligence has only accelerated the trend. Mr.
Wittmeyer, who also lives in Portland, said the coding projects he once did —
like creating a tool that calculates the optimal window sizes for a facade —
can often be done by someone far less skilled than he is. “Anyone with a free
subscription to Claude, ChatGPT, could do a decent amount of what I could do
before,” he said.
Until she
was laid off in the spring of 2024, Charlene Chen worked as the corporate
counsel for a medium-sized law firm in New York, where her responsibilities
included handling the firm’s employment agreements with partners and contracts
with vendors. She said that many companies have software that automates some of
these functions, which may have complicated her job search.
As her
search stalled, she began to look outside her field and at one point landed a
temporary data-privacy compliance job with a New York City municipal agency.
She quit after the first day. “There was a mouse trap under my desk and it
smelled like urine,” she said. “Sitting there in the cubicle looking at that
mouse trap made me feel so bad about myself.” She later flirted with paying
$3,600 to a career coach before deciding it was too costly and might be a scam.
She was thrilled to land another temporary job last week.
Dr.
Mueller, the expert on long-term unemployment, said that college-educated
workers may have more trouble finding jobs in a shrinking industry than workers
without a degree because they are more likely to have skills or connections
that are unique to that field. They may also be prone to excessive optimism and
slow to realize that some of their traditional jobs are vanishing.
“You find
yourself in a situation where you think, ‘I should have accepted that job
earlier,’” Dr. Mueller said. “That mechanism could be strong in a market where
you have this restructuring and people have to switch from one sector to
another.”
Jeremey
Davis, who was laid off as a senior director of engineering at Nielsen, the
audience measurement firm, was offered a job early in his search, but turned it
down because he was interviewing for another that he preferred. Roughly 11
months, 1,200 applications and 17 interviews after losing his job, he is still
out of work. “I rolled the dice and they didn’t offer me the other position,”
he said.
A colonel
in the National Guard, Mr. Davis volunteers for extra guard duty to help pay
the bills. He says that the number of applicants for each job has increased now
that it is so easy to apply online, and he worries that it has become harder
for job candidates to stand out.
Emma
Wiles, an expert on the use of algorithms in hiring at Boston University, said
that A.I. and other software tools can make the hiring process more random by
creating a flood of similar-looking applications. That could hurt
college-educated workers, who may have been less likely to get overlooked
beforehand.
Mr.
Wittmeyer has also chafed against what he sees as an explosion of applications
on sites like LinkedIn. He has sent out over 200 applications and heard back
from only seven companies. In the meantime, he is thankful that his wife has a
steady job and he has been trying to turn his hobby — board-game making — into
a career.
In 2023,
he and his wife raised more than $100,000 on crowdfunding sites to build a game
where players pretend to be tycoons who build ski resorts, eventually turning a
small profit. He is finishing up another game, in which players compete to
become the most popular airline at an airport, and expects to raise funds for
it this fall.
“That’ll
be our third game,” he said, adding hopefully: “I think it will make some
money.”
If you
are having thoughts of suicide, call or text 988 to reach the National Suicide
Prevention Lifeline or go to SpeakingOfSuicide.com/resources for a list of
additional resources. If you are someone living with loss, the American
Foundation for Suicide Prevention offers grief support.
Noam
Scheiber is a Times reporter covering white-collar workers, focusing on issues
such as pay, artificial intelligence, downward mobility and discrimination. He
has been a journalist for more than two decades.
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