AI Could Push College Grad Unemployment to 25%

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Dec 3, 2025

A U.S. Senator just warned that unemployment for recent college grads could hit 25% within five years because of AI. It’s not the layoffs we’re seeing today that scare him most – it’s the jobs that will simply never exist. Here’s why he thinks we’re running out of time…

Financial market analysis from 03/12/2025. Market conditions may have changed since publication.

Picture this: you’ve just spent four years and probably six figures earning a degree, walked across the stage, tossed the cap, and now you’re ready to launch your career. Except the launch pad is gone. That’s the scenario a seasoned U.S. Senator painted this week, and honestly, it stopped me cold.

He didn’t mince words. Recent college graduate unemployment is already flirting with 9 percent. Give it three to five years, he said, and we could be looking at 25 percent if the country sleeps through the AI revolution happening right under our noses.

The Quiet Crisis No One Wants to Name

We’re used to hearing about factory workers or truck drivers losing ground to automation. That story feels distant for most college-educated families. But the senator made a chilling point: the next wave isn’t coming for blue-collar jobs. It’s coming for the exact white-collar entry-level roles that millions of graduates have counted on for decades.

And here’s the part that really got under my skin. The damage won’t show up in splashy layoff headlines. It will show up in silence – in job postings that never appear, in internship programs that get slashed by half, in first-year analyst classes that quietly disappear.

Major banks have already told lawmakers they’re cutting entry-level hiring in half this year and planning the same for next year. Accounting firms, law firms, consulting groups – the pattern is spreading. The jobs simply aren’t being created.

Why This Feels Different From Past Disruptions

Remember when politicians said “learn to code” was the answer to coal mine closures? That advice aged like milk. Coding bootcamps exploded, and now even junior software roles are under threat from AI that writes clean code faster than most humans.

We’ve been here before with globalization and offshoring, sure. But those shifts took a decade or more to play out and mostly hit manufacturing. This feels faster, broader, and – maybe most frightening – it’s hitting the educated class that thought a degree was bulletproof.

“I’m more worried about the jobs that will never be created in the first place.”

A bipartisan voice in the Senate

The Political Powder Keg Building in Plain Sight

Imagine an entire generation – already saddled with record student debt – locked out of meaningful work in their twenties. Then imagine their parents, who sacrificed to pay for that education, watching the return on investment evaporate.

The senator was blunt: people will be furious. And that anger won’t neatly split left or right. It will fuel a kind of anti-innovation populism that could make today’s culture wars look tame.

I’ve watched polling on this, and the numbers really are stunning. Young adults are more worried about AI taking their future jobs than almost any other demographic. When that anxiety collides with economic reality, the backlash could be historic.

What Actually Needs to Happen (And Why It’s So Hard)

First, we need real data. Not anecdotes, not hype – hard numbers on which roles are disappearing, which industries are quietly freezing hiring, and how fast the change is spreading.

A bipartisan pair of senators is pushing legislation to force companies to report AI-driven job displacement. The goal isn’t punishment; it’s visibility. Without a shared fact base, we’re just shouting past each other.

  • Banks and consulting firms would track reductions in entry-level cohorts
  • Tech platforms would disclose automation of knowledge-work tasks
  • Government statisticians would finally have a way to measure “jobs not created”
  • Universities could see in real time which degrees are losing labor-market value

Getting companies to cooperate won’t be easy. No one wants to advertise that their shiny new AI is eating jobs. But the alternative – flying blind into a 25 percent youth unemployment scenario – is worse.

The Solutions People Keep Offering (And Why They Fall Short)

“Just become a plumber.” I’ve heard executives say this with a straight face. Look, I’m not knocking the trades – we desperately need skilled tradespeople, and they’re going to make good money. But telling millions of 22-year-olds with English or psychology or marketing degrees to pivot overnight into HVAC is fantasy.

Besides, when was the last time a Fortune 500 CEO encouraged their own kid to skip college and pick up a wrench? Exactly.

Universal basic income gets thrown around too. Some tech billionaires seem to think the answer is just mailing everyone a check and calling it a day. That might keep the lights on, but it doesn’t replace purpose, status, or the social contract that work represents for most people.

The Gap Period Nobody Wants to Talk About

Here’s what keeps me up at night. Even the most optimistic AI advocates admit there will be a transition gap. New AI-centric jobs will eventually appear – prompt engineers, ethics compliance roles, synthetic data curators, who knows. But those jobs will require skills we’re barely teaching today.

In the meantime, we could have five to ten years where millions of educated young adults are overqualified for the shrinking pool of traditional roles and underqualified for the emerging ones. That’s the danger zone.

Think of it like musical chairs, except when the music stops, half the chairs have vanished and the remaining ones require skills no one announced in advance.

What Can Actually Move the Needle

Government alone can’t fix this. Companies alone won’t. Universities are too slow. We need an uncomfortable but urgent collaboration.

  • Massive expansion of paid apprenticeship models in tech and finance
  • Tax incentives for companies that maintain or grow entry-level hiring
  • Federal funding for rapid-reskilling programs tied to real employer demand
  • Transparency requirements so students know which degrees still lead to jobs
  • Public-private partnerships to define and credential the actual skills AI can’t replace (yet)

None of these are silver bullets. But doing nothing guarantees the 25 percent scenario.

The Social Media Parallel We Can’t Ignore

Lawmakers spent years holding hearings about social media’s impact on teens. They wrote reports. They grilled executives. And in the end? Almost nothing changed until the damage was obvious to everyone.

The senator who raised this alarm used to be a tech investor. He’s pro-innovation, pro-growth. But he sees the same pattern repeating – only this time the stakes are orders of magnitude higher.

“If we had put guardrails on social media earlier, we might have a healthier generation today. That will look tiny compared to AI workforce disruption.”

The Bottom Line for Anyone Under 30

If you’re in college or recently graduated, none of this is meant to scare you into paralysis. It’s meant to wake everyone up – you, your parents, your professors, your future employers.

The old playbook – get any degree, land any entry-level job, climb the ladder – is breaking in real time. The new playbook isn’t written yet, but it will reward adaptability, continuous learning, and probably a willingness to zigzag rather than climb straight up.

In my view, the kids who treat the next five years like an extended experiment – trying different roles, building in public, mastering adjacent skills – will be the ones who thrive when the music starts again.

The rest risk becoming the first generation in modern history to be worse off than their parents, not because they failed, but because the game changed mid-play and nobody bothered to explain the new rules.

We still have time to get this right. But the clock is louder than most people realize.

A financial plan is the road map that you follow during your life journey. It helps guide you as you make decisions that will impact your financial future.
— Suze Orman
Author

Steven Soarez passionately shares his financial expertise to help everyone better understand and master investing. Contact us for collaboration opportunities or sponsored article inquiries.

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