Degrees in science, technology, engineering, and mathematics—commonly referred to as STEM—have historically been perceived as gateways to lucrative and stable career paths. However, new data from the Federal Reserve Bank of New York indicates that this long-held belief is undergoing a significant transformation. Recent graduates aged 22 to 27 who earned degrees in certain STEM fields are increasingly facing unemployment, raising concerns about the future viability of these qualifications in a rapidly evolving job market.
The report reveals that the unemployment rate for recent graduates in specific STEM disciplines has surged past the national average for new college graduates. According to the analysis, physics majors grapple with an alarming unemployment rate of 7.8%, making it the second-worst-performing degree among more than 70 evaluated. Notably, only anthropology majors fared worse, with a staggering unemployment rate of 9.4%. Computer engineering graduates closely follow physics, with an unemployment rate of 7.5%. In stark contrast, the overall unemployment rate for recent graduates of all majors stands at 3.9%, while the national unemployment rate for young workers, regardless of education, is 6.9% as of March 2023.
High unemployment rates among recent STEM graduates represent a developing trend that has not gone unnoticed. A year prior, degrees like art history and liberal arts were often cited among those experiencing the highest unemployment levels, with rates hovering around 8% and 7.9%, respectively. However, this year’s data strongly suggests that while traditional higher-education pathways in the humanities may have been derided, the employment landscape is becoming increasingly complicated for STEM graduates.
Experts point to several factors contributing to this shift, with one prominent explanation being the dramatic increase in the number of students pursuing STEM degrees. In the last decade, educational institutions have awarded approximately 34% more STEM degrees, peaking in 2016. This oversupply of graduates in certain fields appears to have outstripped available job opportunities, creating a challenging environment for newly minted professionals.
Adding another layer of complexity to the situation, Mark Cuban, the billionaire entrepreneur known for his role on the television show “Shark Tank,” has long warned about the potential ramifications of artificial intelligence (AI) and automation on employment, particularly regarding traditionally secure fields like STEM. Cuban has argued that in the future, the demand for liberal arts graduates may eclipse that of STEM majors, a prediction that is increasingly resonating in today’s job market as generative AI tools become more prevalent.
Recent advancements in AI have begun to automate tasks historically performed by STEM professionals, leading some industry commentators to question whether certain degrees will retain their value in the face of rapidly improving technology. For instance, tools like ChatGPT excel in coding, data analysis, and other technical skills that once required extensive human input. This raises serious questions about the long-term portability of specific STEM degrees in a market where efficiency and cost-effectiveness are becoming paramount.
The changing dynamics in the job market are underscored by a recent survey from the National Association of Colleges and Employers (NACE). In 2014, just 6.1% of computer engineering graduates reported searching for full-time employment six months post-graduation, while approximately 80% had already secured jobs. Fast forward to 2023, and the landscape looks starkly different: 13.7% are actively seeking employment, and only 64% are employed full-time. Although all college graduates are facing declining employment prospects, the shift appears to be more pronounced in particular STEM disciplines.
Despite high unemployment rates, it is critical to note that many STEM degrees continue to offer competitive salary potential. For instance, graduates in aerospace engineering can command salaries as high as $125,000 at mid-career, peaking as the highest-paying degree category, according to NY Fed data. Recent graduates in chemical engineering can expect starting salaries of approximately $80,000. Moreover, STEM graduates are generally less likely to become underemployed, indicating that they often secure jobs commensurate with their educational qualifications compared to their liberal arts counterparts.
However, within the broader discourse about the value of education, recent reports suggest that STEM fields are not immune to the shifting tides of the economy. A study from Oxford Economics articulates concerns that entry-level positions are being displaced by the rapid integration of artificial intelligence technology, contributing to higher unemployment rates among recent graduates across various disciplines.
As employers continue to embrace the efficiencies provided by AI tools, the implications for graduates across the board are becoming increasingly stark. The workforce landscape is drastically altering, and while some sectors will still require a degree in STEM to meet complex challenges, the competition is fierce and the entry barriers appear to be rising. This has led to calls from educators, policy-makers, and industry leaders alike to reevaluate the value offerings of various academic programs to better align them with the demands of an evolving economy.
In summary, while STEM degrees have long been marketed as reliable paths to employment and financial stability, the latest data reveals a troubling trend for recent graduates in these fields. With a combination of rising unemployment rates among specific STEM majors, increasing saturation of the job market, and the encroaching influence of artificial intelligence, the landscape for these qualifications is becoming decidedly more complex.