Are Gen Z’s Degrees a “Waste”?

For decades, the attainment of a four-year degree has been considered an essential aspect of the American experience. Every year, mere months after completing high school, millions of young graduates are whisked off to America’s costly institutions of higher education to earn a degree that promises better job prospects, higher wages, and an elevated quality of life. America’s latest college graduates, however, have increasingly begun to question this narrative. A recent Indeed report found that 51 percent of Gen Z job seekers believe their degrees were “a waste of money.” In today’s rapidly changing job market, a college education no longer obviously provides the advantage it once did.

The survey found that “the ongoing push to deemphasize college degree requirements in job postings” is a big factor in Gen Z’s dismissal of degrees. Skills-based hiring is rapidly catching on in America. Indeed, a previous Indeed survey indicated that 51 percent of hiring managers “in key markets” said that “relevant, on-the-job experience is the most important indicator” of a potential candidate’s quality; educational degrees were at the bottom of the list. The majority of employers seem to care more about a candidate’s skills than about his or her education. And universities, seemingly, are not the place to learn important professional skills: 65 percent of graduating seniors will emerge from their institutions feeling less than fully prepared to “participate effectively in meetings,” and 41 percent feel the need for more preparation for in-person communication at work, according to a recent Handshake survey.

The value of a college degree isn’t zero just yet, and hiring processes aren’t shifting as rapidly as reporting might indicate. In this light, Gen Z is right to be skeptical of the usefulness of a college education. But the value of a college degree is not quite zero just yet, and hiring processes aren’t shifting as rapidly as employers’ reported beliefs might indicate. As of the 2024 survey’s release, a mere 16 percent of U.S. employers had removed degree requirements from their job postings. For a variety of reasons, many employers are hesitant to completely eradicate the education requirement when looking for candidates. Moreover, for certain careers, such as those in medicine, law, or academia, a degree will likely always be required. It seems as though a college education still indicates something to employers about a candidate’s potential. When it comes to job-seeking, college degrees may still be “worth it,” at least for now.

But it seems clear that the once-guaranteed wage boost accompanying a college degree is diminishing. Nevertheless, businesses are steadily moving towards skills-based hiring. As more hiring managers remove educational requirements from their postings, the demand for degree-holding candidates will continue to decrease. Lower demand means lower wages for these workers; “you’ll earn more money if you go to college” may still be true, but the value of the college wage premium has already begun to decrease. A recent Cleveland Fed report found that the college wage premium has fallen by 10 percent over the last quarter century, and it will probably continue to do so over the next several decades. Numerous factors are affecting these changes, but it seems clear that the once-guaranteed wage boost accompanying a college degree is diminishing.

Rapid technological improvements over the last decade have formed another argument against the value of a college degree for Gen Z. With most businesses implementing some form of AI in their everyday work, it’s unsurprising that many employees and job-seekers feel replaced by this technology. Forty-five percent of Gen Z job seekers believe AI has “made their college education irrelevant”—and perhaps with good reason, for AI is rapidly improving in its ability to proofread, summarize, write, brainstorm, and create, reducing the need for employees with those same skills. Just two years ago, 44 percent of graduating seniors were worried about how AI would affect their careers; today, that number has increased to 62 percent. To expand their own skill sets and improve their “hireability” in such an environment, many young workers are enrolling in professional-development courses. These courses, which individuals take to improve their AI skills and make themselves more attractive job candidates, are often offered by companies and other non-university institutions. Meanwhile, colleges are still focused on the detection of unwarranted AI use on term papers, an approach that risks ignoring AI’s unprecedented impact on the job market.

Taking into account the realities of a changing labor market, the declining college wage premium, and unprecedented technological advancements, it seems as though the once-unquestioned value of a college education is diminishing. College degrees do provide some advantage when it comes to job-seeking or wages, for now; however, alternative routes such as trade schools, apprenticeships, and microcredentials are gaining increasing popularity among young individuals who wish to improve their skill sets without spending four years and tens of thousands of dollars on a degree that may eventually provide only a negligible benefit. Society is realizing that a college education is no longer the “career-boosting tool” it was once perceived to be in all cases. Perhaps, over time, the university will again be held to its original purpose: educating and developing the minds of individuals so that they might be productive, thoughtful, and well-formed citizens.

Sophia Damian is a student at Wake Forest University and a Martin Center intern.