While no crystal ball can predict the future, sometimes demographics paint a startlingly clear picture of what lies ahead—and for today’s young adults, that picture is fraught with economic uncertainty. According to recent data from the Federal Reserve Bank of New York, Americans aged 22 to 27 are confronting a set of hurdles that previous generations did not face at the same stage of life. These young people, who should be embarking on household formation and laying the foundations of their adult lives, are instead grappling with economic realities that may delay or derail their progress.
The Federal Reserve’s findings reveal a labor market for recent college graduates that is far less hospitable than many assume. Wages for those with bachelor’s degrees have barely budged over the past three decades. In 1990, the median annual wage for this group stood at $56,642 in constant dollars; by 2024, it had crept up to just $60,000—a mere 5.9% increase over 34 years. Meanwhile, inflation has surged. According to the U.S. Bureau of Labor Statistics’ inflation calculator, $1 in late 1990 had the buying power of $2.36 by the end of 2024—meaning inflation outpaced wage growth by a wide margin. Even more telling, the 25th percentile wage for recent graduates actually fell slightly, from $43,216 in 1990 to $43,000 in 2024, when adjusted for inflation.
Unemployment rates among recent college graduates are also a cause for concern. In March 2025, 5.8% of graduates aged 22 to 27 were unemployed, compared to 6.9% of all workers in that age group. The overall unemployment rate for all college graduates was just 2.7%, and for all workers, it stood at 4.0%. This divergence in fortunes for recent graduates first became apparent in 2018 and intensified during the pandemic, with little sign of improvement since.
Underemployment—the share of graduates working in jobs that do not typically require a college degree—paints a similar picture. According to the Federal Reserve’s data, 33.4% of all college graduates are underemployed, while the figure rises to 41.2% for recent graduates. Although this underemployment rate has actually declined since 2010, it remains stubbornly high.
Even graduates in so-called STEM fields, often touted as a surefire path to economic stability, are not immune. In 2023, according to the Federal Reserve, several STEM majors found themselves among the top 10 with the highest unemployment rates: physics (7.8%), computer engineering (7.5%), computer science (6.1%), chemistry (6.1%), and information systems and management (5.6%). These rates are notably higher than the national unemployment rate, which was under 4.0% at the time.
Taken together, these trends suggest that younger Americans are facing growing disadvantages that could reshape expectations for years to come. The ripple effects may extend far beyond individual households, influencing everything from housing markets to consumer spending and the broader economy. According to the Federal Reserve Bank of New York, these shifts could have as-yet-unknown consequences for home building, multifamily properties, retail, industrial real estate, and other sectors—ultimately reshaping the landscape for generations to come.
Source: “Young Adults’ Financial Struggles Reverberate Through CRE”
