The Confidence Crisis: Why Young Workers Are Losing Faith in the Job Market

In May 2025, worker confidence in the U.S. labor market sank to its lowest point in nearly a decade. Glassdoor reports that only 44.1% of employees expressed a positive six-month business outlook, citing mounting economic instability, tariff threats, and rising layoffs. For entry-level workers—the newest entrants into the workforce—the numbers were even worse: just 43.4% expressed confidence, the lowest since Glassdoor began tracking this data in 2016.

These numbers reflect more than just a cyclical downturn—they point to a deeper structural issue at the heart of the U.S. economy and higher education system.

Layoffs Rising, Job Growth Slowing

According to Challenger, Gray & Christmas, U.S.-based employers cut 93,816 jobs in May, a 47% increase over the same month last year. Meanwhile, the U.S. added just 139,000 jobs, down from April’s total of 147,000, according to the Bureau of Labor Statistics. Despite headlines touting “full employment,” many workers—especially younger ones—see fewer opportunities and reduced mobility.

The Collapse of Upward Mobility

For recent college graduates, the path from education to employment is increasingly blocked. Hiring has slowed across multiple sectors, particularly in roles that were once considered reliable entry points into the professional world. According to Daniel Zhao, lead economist at Glassdoor, “The low hiring environment we’re in right now means it’s hard for young grads to get onto the career ladder in the first place.”

For those who do land jobs, internal advancement has become more difficult. Companies are not promoting or hiring at the same rates as before, and competition has intensified as experienced workers, displaced by layoffs, vie for the same positions.

As Zhao notes, this creates “more bunching at the bottom of the career ladder,” further reducing the chances for advancement. The result is a stagnant and oversaturated early-career labor market that undermines the basic assumption that education leads to mobility.

The Rise of the Educated Underclass

This moment underscores what sociologist Gary Roth has called the emergence of an “educated underclass”—a growing segment of workers with college degrees who find themselves in precarious, low-wage, or unstable employment. The promise that higher education guarantees success in the labor market has unraveled for many, replaced by a cycle of job insecurity, career stagnation, and rising debt.

Colleges and universities continue to promote degree attainment as the key to upward mobility, yet millions of graduates are discovering that the market does not need, or will not absorb, their skills at a level commensurate with their education. What began as a student debt crisis is now a broader economic phenomenon: the creation of a surplus class of credentialed workers whose aspirations exceed the system’s capacity to deliver.

This “educated underclass” is not simply the result of poor individual choices or bad timing—it is a structural outcome of a labor market and education system misaligned with one another and increasingly shaped by financialized logics. As more employers demand degrees for routine work, and as automation and outsourcing reduce the number of stable middle-class jobs, the role of college becomes less about opportunity and more about gatekeeping and economic sorting.

Higher Education’s Complicity

The current crisis also raises hard questions about the higher education industry itself. Institutions have continued to expand enrollment and raise tuition, fueling a multi-trillion-dollar student debt industry, while offering little accountability for post-graduation outcomes. Marketing campaigns still sell the dream of transformation through education—even as graduates enter a labor market defined by instability, underemployment, and diminished returns on investment.

A System in Crisis

The ongoing decline in worker confidence, especially among the young, may signal not just temporary economic anxiety, but a legitimacy crisis for both the labor market and the education system that feeds it. As job cuts increase and growth stagnates, more Americans—especially those carrying degrees and debt—are beginning to question the rules of the game.

At the Higher Education Inquirer, we continue to track the rise of the educated underclass, the erosion of labor market mobility, and the complicity of institutions that have sold debt-financed credentials as a ticket to the middle class. The gap between educational promise and economic reality has become too large to ignore.