Optimist Economy Podcast Summary: "About That College Grad Who Can’t Find a Job…"

Release Date: July 1, 2025

Hosts Kathryn Anne Edwards and Robin Rauzi tackle the pressing issue of youth unemployment in this insightful episode of the Optimist Economy podcast. Focusing on the challenges faced by recent college graduates in the current U.S. job market, the hosts dissect media narratives, analyze economic research, and explore underlying labor market indicators. Despite the grim statistics, Kathryn and Robin maintain their optimistic outlook, emphasizing the potential for systemic improvements.

1. Introduction and Retcon (00:00 - 05:35)

Kathryn opens the episode by addressing listener feedback and making necessary corrections to previous statements, particularly regarding the comparison of the U.S. higher education system with those of other countries. She acknowledges that earlier assertions may have overstated the uniqueness and superiority of the American system.

"You can just delete from your memory what I said about higher education in other countries because we didn't have a single European or foreign listener who agreed with... we have a higher education system that does a lot of things that we really, really love." [02:01]

The duo also touches upon economic concepts like the income and substitution effects, admitting occasional struggles with correctly naming these terms. Kathryn shares an anecdote about a world-class econometrics professor who had to derive basic formulas by hand, highlighting that even experts sometimes need to revisit fundamentals.

"Understanding doesn't always come with perfection." [05:17]

2. Understanding "Cottoned On" and Workplace Culture (05:35 - 08:45)

Robin explores the etymology of the phrase "cottoned on", explaining its origins and current usage in American slang to mean understanding or grasping something. Kathryn humorously refers to their use of "tall cotton" to signify prosperous times.

"We are... bringing America tall cotton. Hope you cotton on. Did I do it right?" [07:29]

The hosts reflect on cultural references and share light-hearted remarks about language and its quirks, setting a relaxed tone before delving into more serious topics.

3. The Narrative on Youth Unemployment (09:00 - 17:00)

Kathryn and Robin shift focus to the core topic: youth unemployment, especially among recent college graduates. They note the surge in media coverage claiming that graduates are facing the "worst job market in years," citing sources like Vox, The New York Times, CNN, and Bloomberg.

"There was a dozen of these stories that came out between May and early June... literally, like, there was a dozen of these stories." [09:06]

Robin questions the validity of these claims by comparing current statistics to historical data, suggesting that similar patterns have occurred during past recessions without necessarily indicating an unprecedented crisis.

4. Critique of Media Reporting (17:00 - 32:28)

The hosts critically analyze recent media articles, pointing out missing context in unemployment statistics. They emphasize that while unemployment rates for college graduates appear higher, they are still lower compared to those for high school graduates and many demographic groups, such as Black workers.

Kathryn asserts:

"The unemployment rate for college Graduates, even if they're under 25, is categorically below the unemployment rate for high school graduates of the same age." [12:20]

They challenge the narrative that AI is the primary cause of graduate unemployment, highlighting the lack of concrete data linking the two. Robin adds:

"There was a missing middle in them, in all of these stories... you could have asked employers if they are actually holding off because of uncertainty." [15:14]

5. Economic Research on Job Skills and Unemployment (17:00 - 25:34)

Delving into economic studies, Kathryn presents findings from two pivotal papers: "Upskilling" and "Downskilling." These studies analyze job postings to understand the evolution of education and experience requirements over time.

• Upskilling (2007-2010): During the Great Recession, increased unemployment led employers to demand higher skills and experience for jobs.

  "The increase in unemployed workers during the Great Recession can account for 18 to 25% of the increase in skill requirements between 2007 and 2010." [19:00]

• Downskilling (2010-2014): As unemployment rates fell post-recession, skill requirements decreased, making it easier for entry-level candidates to fill positions.

  "A 1 percentage point reduction in the local unemployment rate is associated with roughly a 0.27 percentage point reduction in the fraction of jobs requiring at least a bachelor's degree." [18:31]

Kathryn explains that the current elevated unemployment for young graduates serves as a bellwether of underlying economic weakness, stating:

"These are a really easy to talk about group in a sympathetic way for newspaper articles... but they're part of a broader economic symptom, which is the lack of hiring or the slowdown in hiring." [30:11]

6. Current Labor Market Indicators and Policy Uncertainty (25:34 - 37:07)

The discussion turns to current hiring rates, which have significantly declined, resembling those seen during the aftermath of the Great Recession. Kathryn points out that while overall unemployment remains low (~4%), the hiring rate has dipped to levels last seen in 2013, signaling slowed job creation.

Robin notes:

"Most of the time what we see happening to young workers is a lagging effect... this is a really long effect that persisted afterward." [27:06]

Kathryn adds that policy uncertainty—regarding tariffs, interest rates, and other economic factors—contributes to employers' hesitancy in hiring, impacting job creation and future employment opportunities for graduates.

"What you are seeing is uncertainty in the economy... so that is what we are seeing." [24:15]

7. Implications for College Graduates (37:07 - 45:11)

While acknowledging the challenges, Kathryn emphasizes that recent college graduates still fare better than their less-educated peers and many demographic groups. She highlights:

"The unemployment rate for college Graduates... is considered absolutely normal for the black unemployment rate to be higher than 5% or higher than 6%." [12:20]

The hosts discuss how a restricted hiring environment disproportionately affects those with less experience, making it harder for new entrants to gain necessary footholds in the labor market. They stress the importance of maintaining the value of a college degree and dispel notions that current struggles negate its worth.

8. Optimistic Outlook and Conclusion (45:11 - 55:02)

Despite the challenges highlighted, Kathryn and Robin maintain an optimistic perspective, emphasizing systemic issues rather than individual shortcomings. They point to positive shifts, such as increased media sympathy towards unemployed graduates and the enduring value of higher education.

"Some of the most damaging parts of a recession on young workers is that they don't have as much movement during really critical years of college graduates who are 20 to 24." [21:36]

The hosts conclude with light-hearted discussions, suggesting humorous "executive orders" to improve airline performance and acknowledging acts of kindness during stressful situations. They reinforce the importance of positive reinforcement in professional settings and express hope for future economic improvements.

Notable Quotes

• Kathryn on Media Coverage:

  "You can just delete from your memory what I said about higher education in other countries because we didn't have a single European or foreign listener who agreed with..." [02:01]

• Robin on AI and Job Market:

  "There was a missing middle in them, in all of these stories... you could have asked employers if they are actually holding off because of uncertainty." [15:14]

• Kathryn on Policy Uncertainty:

  "What you are seeing is uncertainty in the economy... so that is what we are seeing." [24:15]

• Robin on Sympathy for Unemployed:

  "That's good. The journalists have cottoned on to the fact that they are not just lazy 20-somethings." [43:38]

• Kathryn on Empathy for Unemployed College Graduates:

  "Showing sympathy for unemployed people, even if it is like the ones start. With the privileged college graduates... We have to start somewhere." [43:38]

Conclusion

Through a balanced analysis of current data, historical context, and economic research, Kathryn Anne Edwards and Robin Rauzi offer a nuanced perspective on youth unemployment. They challenge alarmist media narratives by providing depth and context, highlighting systemic issues like hiring rate declines and policy uncertainty. While acknowledging the genuine struggles of recent graduates, they uphold the value of higher education and advocate for broader economic reforms to foster a more robust and inclusive job market. Their optimistic approach encourages listeners to view current challenges as opportunities for building a better economic future.