Americans Without College Degrees Are Having One of the Best Job Markets in Years

Unemployment among younger workers who didn’t go to college has rarely been lower in recent decades. It is the opposite story for college graduates.

For most U.S. workers—those without college degrees, that is—it is one of the best job markets in decades.

A job fair in Dallas in July.

In fact, 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.

What is just as remarkable is how different that is from the experience of job seekers who did graduate from college, says Gad Levanon, Burning Glass’s chief economist. For most of the past two decades, the two groups largely tracked each other, in good economic times and bad.

Now, though, just as job hunters without degrees are having one of their best runs, those with college educations are having one of their worst. And those with advanced degrees or in fields such as science and technology are having an even harder time than usual.

That divergence of fortunes is a departure from what the U.S. economy has seen for years, and much of it boils down to supply and demand: There aren’t enough skilled tradespeople to go around, for example, as older generations retire and immigration drops.

“There’s a rapidly growing supply of people with a bachelor’s degree, and you have a rapid decline of people who don’t,” Levanon says. “I don’t think it’s a temporary thing.”

A wrinkle: 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. That is well below the 3.6% rate for workers with just some college education, and 4.7% for people with a high-school diploma only.

So, to gauge how the job market has shifted for each cohort, Levanon compared current unemployment rates for the different groups with their own range of unemployment rates since 2003. The analysis included data through July.

By that measure, the job market looks much better, historically speaking, for blue-collar workers, including those in construction and on manufacturing lines, and manual-service workers—think security guards, nurses and many restaurant and retail employees.

Chart

The more physical and in-person the work is, the lower the unemployment tends to be by that occupation’s own historical standards. Friday’s booming jobs report reinforced the trend: Food services and drinking places added 59,000 jobs in August, more than a third of all 162,000 jobs added to the U.S. economy last month.

By contrast, 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.

Zachary Blackmon tried to land a full-time job offer long before getting a bachelor’s degree in international business and operations management from the University of Cincinnati in May. Seventy applications later, he had gotten just three interviews.

With no job in sight by January, he decided to speed up plans to go to business school.

“Students like me who have done everything they’re supposed to do, we’re still facing challenges,” says Blackmon, who is now enrolled at the University of Dayton. “I kind of am hoping that the M.B.A. will open the door more concretely.”

Sitting it out

Not everyone is employed or looking for work, which is what unemployment figures capture. Millions of Americans aren’t working because of illness or disability, while in school or because they have given up job-hunting after long unemployment.

Especially among younger workers, those with less education are more likely to be missing from the labor force. That includes nearly a quarter of those with a high-school diploma, compared with about one in seven for those with a college or advanced degree.

Levanon says it is an open question whether the drought in entry-level professional jobs continues, and how much of a dent AI will make in blue-collar and service jobs with advancements in robotics and other automation.

Meanwhile, he has advice for recent college graduates—a group including one of his own children: Broaden your horizons, whether geographically or otherwise.

“It may be very hard to find a job at top companies, but it’s easier if you’re willing to compromise,” he says.

Write to Theo Francis at theo.francis@wsj.com and Ray A. Smith at Ray.Smith@wsj.com