Non-college workers see best job market in years as grads struggle

The U.S. labor market has flipped the traditional script. According to a new Wall Street Journal report, for most U.S. workers, those without college degrees, it is one of the best job markets in decades, while college-educated job seekers are having one of their worst runs in years.

The data behind the divergence

The unemployment rate for workers ages 22 to 34 who never graduated from college has rarely been lower in the past two decades, according to a new analysis by labor-market think tank Burning Glass Institute.

On the other side, college-educated workers ages 22 to 34 years old have only seen worse unemployment in the past two decades during the pandemic and the economy’s slow rebound from the 2007-09 recession.

Why the flip is happening

Much of the story is supply and demand. There aren’t enough skilled tradespeople to go around as older generations retire and immigration drops.

At the same time, more Americans have college degrees than ever, just as artificial intelligence is doing more of the entry-level work companies typically hire young graduates for. Burning Glass chief economist Gad Levanon told the WSJ, “There’s a rapidly growing supply of people with a bachelor’s degree, and you have a rapid decline of people who don’t.” He added, “I don’t think it’s a temporary thing.”

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The catch for degree holders

Absolute levels still favor the college crowd. On an absolute scale, it is still easier to find a job with a college degree. The unemployment rate for degree-holders in their prime working years, ages 25 to 54, averaged 2.7% for the 12 months ending in July.

But the trend matters for spending, wages, and where hiring dollars flow. Blue-collar tightness supports wage growth in trades and services, while white-collar softness pressures consumer names tied to young professional spending.

Options market and stocks to watch

The split labor market has direct read-throughs for several sectors. Watch for:

• CAT: Skilled-trade demand and infrastructure hiring keep construction equipment in focus.
• HD: Home Depot is a direct beneficiary if tradespeople keep getting hired and paid.
• UBER: Watch how tighter non-degree labor supply affects gig-driver economics.
• MSFT: AI displacement of entry-level white-collar work cuts both ways, more Copilot adoption, but softer hiring at customers.
• SOFI: Student-loan refi demand tracks the fortunes of young degree-holders, watch for stress signals.

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