Remote work — not AI — could be the main factor behind rising unemployment among young college graduates, according to a June 1 analysis from the Federal Reserve Bank of New York.
Unemployment among college graduates younger than 29 averaged 3.1% from 2017 to 2019, then climbed 20% to 3.7% from 2022 to 2025. The analysis’ authors — a research economist and two economics professors — estimate remote work accounts for 64% of that recent increase.
They tie the rise to the four-fold jump in remote work since the pandemic, which makes it harder for leaders to train and mentor new team members. Organizations may also be reluctant to hire less-experienced employees into remote roles. Comparing unemployment rates in “remotable” jobs with those in “non-remotable” ones, the authors found that the overall increase among young college graduates traces back to remotable occupations.
While some analysts have pointed to AI as a driver of young graduates’ job market struggles, the rising unemployment predates AI’s widespread adoption, according to the analysis. Still, AI was linked to 40% of U.S. job cuts across industries and age groups in May, according to a separate study.
The Federal Reserve Bank study authors also drew on proprietary data from a Fortune 500 company: Employees who work alongside their colleagues receive more feedback and mentorship, while those separated even by a short distance see that support drop off sharply — an effect that hits younger workers hardest.
Remote and hybrid work remains prevalent at many health systems, especially when it comes to filling key roles.
Nashville, Tenn.-based HCA Healthcare had 17,014 open roles on its website as of June 8, with 150 designated as “work from home.” Chicago-based CommonSpirit had 5,184 open positions, with 111 labeled “remote.” At Oakland, Calif.-based Kaiser Permanente, 2,246 total job openings included 340 listed as “flexible” and 30 as “remote.”
