I’d like not to thank the academy: graduates’ fortunes slip

0:28The Economist offensive. But this one seems different. Captured Russian officers say that they, and President Vladimir Putin, see it as the final assault, round 12, endgame. And this is the moment in the year when my summer holiday finally comes into view, and I'm already dreaming of having time to read. To help me plan, and you too, my colleagues have come up with a list of the best books of the year so far.

1:01First up, though.

1:09For decades, the plan for ambitious youngsters was simple. Step one, go to university. Step two, find a graduate job. Step three, profit. These days, though, that business plan isn't so dependable. I graduated with a master's degree a few years ago, but the market has been really tough. On top of my studies, I have a year of internship experience, but when I'm applying for entry-level jobs, I'm still being told that I like experience. Want to work in tech? Big firms are cutting jobs. Civil service? That doesn't pay so well anymore. Law? AI will soon take your job. And don't even think about becoming a journalist.

1:51Across the rich world, young graduates are losing their privileged position in society. Callum Williams is a senior economics writer for The Economist. Jobs data hints at what's going on. For the first time in history, Americans aged between 22 and 27 who have a bachelor's degree or higher, they actually now face a higher unemployment rate than the national average. And what's been driving that change is an increase in recent grads who are unable to find their first job. and we reckon that the social and political consequences of this broad development are going to be quite profound. You say across the rich world so it's not just an American phenomenon.

2:35No it's not just the trend in the US. So for example if you look at the EU the unemployment rate for young people with a tertiary education so who went to university is now approaching the overall rate for that age group and again if you look at Britain if you look at Canada and if you even look at Japan, they're all on the same path. And in fact, the interesting thing is that this is not just something that happens to the average young grad. It seems also to be happening to the elite as well. So if you look at Stanford's business school, for example, in 2024, only about four in five of them had a job three months after leaving, down from about 90 % in 2021.

3:14So this does appear to be a big change. You can also see this in their wage data. So there's this thing called the university wage premium, which basically measures how much more grads earn than others. And until fairly recently, it was growing. Grads were getting relatively richer than everybody else. But more recently, it's come down and it appears to be shrinking again, not just in the US, but in Britain and Canada also. And then finally, if you ask people, how much do you enjoy your job? For a long time, graduates were much more likely to say, I like my job very much than the average person.

3:48But in fact, more recently, job satisfaction among that group has been falling quite sharply. And so what's going on? What's knocked new grads off their perch? Well, it's a good question. Now, this trend is so new that actually not much has really been written about it, especially by academic economists. So we've had a go at trying to explain what's going on. So on the supply side, you could make the case that maybe the expansion of universities has lowered standards. Let's say in a world where universities basically will take anyone and then they don't really spend much effort on teaching them.

4:22Over time, employers might think, well, there isn't really a difference between grads and non-grads. And maybe grads are actually worse because they haven't had as much life experience. That might be true at the margin. I think what seems to be a more consistent result in the small academic literature is actually to do with the demand side. And basically what this means is that employers today are less interested in employing grads because the kind of skills that are required are shared reasonably equally between both grads and non-grads. So for example, for lots of fairly entry-level service sector work in offices, it requires the use of text and the use of computers and spreadsheets and email and that kind of thing.

5:04Until actually quite recently, it was quite difficult to get to grips with a computer unless you actually did go to a university. And now, of course, that's not the case at all. Everybody has a smartphone. Lots and lots of people have laptops. They're very easy to buy. And so that difference in skills between grads and non-grads is not as big as it was. The final group of factors is a series of contingent factors, which is basically the kind of industries that used to employ lots of grads have been having a slightly different time of late. So for example, if you look at the US, the land of lawyers.

5:38In fact, there are only slightly more lawyers in the US today than there were 20 years ago, even though the population is much bigger. And if you look, say, in the UK, the financial services sector, the 2008 crash really had big effects on that industry. And so it hasn't been growing as fast ever since. And that's, as a result, caused there to be fewer job opportunities for young grads. But how much of this could be folded into the concern that AI is eating low-skilled or early career jobs? Well, this is typically the way it's discussed. people will look at this and they will say that this is the early sign that AI is having an impact on the jobs market.

6:14I think the truth is that these trends came along before AI really took off. So you can see these trends emerging in the 2010s. And so I think it's quite difficult to argue that chat GPT or whatever is causing much of this. But if you see all this as a non-college grads, you're probably feeling a little bit of schadenfreude, right? Is it such a bad thing if grads get knocked off their perch? As an ethical matter, no. No particular group or subgroup deserves to do better than someone else. That said, as a practical matter, it might be bad. The historical evidence shows fairly clearly that when people who think that they're brainy, people who think that they're highly educated, when those people do badly, bad things tend to happen.

7:01So there's this idea that's been going around for a few years from this scientist Peter Turchin who has this concept of elite overproduction and he argues that particularly western societies have a tendency to produce too many elites relative to the number of elite spots that there are in that society and what he shows is that this elite overproduction has been the proximate cause of all sorts of political unrest. So Europe's revolutions of 1848, for example, historians have argued that what they call an excess of educated men was one big contributing factor to those revolutions. And so to bring it slightly closer to home, the case of Luigi Mangione, he's a UPenn graduate, he should really be living a boring and prosperous life.

7:50Instead, as many people will know, he's the guy who is currently on trial for the alleged murder of a health insurance executive. So he's sort of one of the counter elites that Peter Turchin refers to. So looking at the broad brushstrokes, if not the sort of violent particular cases here, I guess the take home question here is about university education itself. Should you do it? Doesn't seem like there's a lot in it. Well, what's interesting is that in the US, more and more people are saying they shouldn't do it. So you do see quite clearly falling enrollment in university courses in the US. The US is actually kind of an exception.

8:28If you look at the rest of the OECD countries, enrollment continues to rise pretty rapidly. The other slightly concerning trend is that it's not clear that people are picking the most marketable subjects. Again, outside America, you've got lots more people doing arts, humanities, social sciences, that kind of thing. Even journalism is taking off as a university course, which is obviously very concerning. Great, great foolishness, yes. Yeah. My worry is that if this kind of reveals anything about how young people see the future world of work, they're likely to have a rude awakening at some point.

9:00Callum, thanks very much for your time. Thank you, Jason.

9:17Night after night, the cities of Ukraine have rung with the sound of explosions. With attacks right across the country, first responders have been extinguishing flames and digging through rubble. As the war drags on, for the fourth year, Russian forces are now beginning their summer offensive. In the past few weeks, Russia has terrorized Ukrainian cities with record numbers of cruise missiles, ballistic missiles and drones. Oliver Carroll is The Economist's Ukraine correspondent. Ukraine has responded with its own attacks on Russian facilities and an astonishing deep operation inside Russia itself.

9:58But the main event has always been the front lines. And despite huge losses, Vladimir Putin continues to believe he can break Ukrainian resolve to achieve a symbolic victory almost at any cost. And how is Putin going to break Ukraine's resolve? How's that going to happen? Well, right now, there are concerns most immediately around the northeastern province of Sumy. Now there, if you remember, this sits right opposite Korsk region, where last August Ukraine staged a brazen operation inside Russia and stayed there for about six months. Russia is basically pushing in the mirror operation. And for the first time since war began, it's actually gaining nearly as much ground there as it's doing in the main theatre in the Donbass to the south.

10:45And it's largely doing that because it's making light work of the fortifications Ukraine has built around there, which aren't particularly suited to drone warfare. But also, for some reason, Ukraine isn't well presented out there. Some of its units have been removed, and Russia is pushing forward there a lot quicker than we expected. But I'm told by Ukrainian intelligence that they think the base scenario is that once Russia establishes a sort of border zone up there, it will shift its focus back to Donbass and Zaporizhia to the south. And will that be more of the same in Donbass? The expectation is the main focus will be around Pokrovsk, where we've seen an awful lot of fighting in the last year, and Konstantinivka.

11:30They're both close to each other in that southern Donetsk basin. And they've been on the front lines pretty much since 2014, when Russia started initially the naval war. And these two cities are essentially the gateway to what's called the Kramatorsk-Slovensk agglomeration, which is the last major piece of the Donetsk region jigsaw. Oli, Russia's been pushing and pushing. So what makes this year's offensive different from others? One source I was speaking to recently put it like this. You have two completely exhausted boxers in sort of round 12 of a brutal match. And that seems to be where we are at the moment.

12:10Right now, clearly, Russia has the edge and it is pushing forward. But it's making fairly slow gains still, zooming aside. And what Ukrainian intelligence is saying is that the Russian officers they've spoken to, they've captured, say they see this as a sort of last final assault. It's designed to shatter Ukrainian morale, to be the one who lands on top of the other one. But on paper, you know, the numbers haven't shifted dramatically. We look up in Sumy, Russia has about 50 ,000 troops there. And a similar force is massed around Konstantinivka, though there is an expectation that will increase.

12:44The problem is the nature of the fighting now. because of the fact it's become a technological front line with drones everywhere. There aren't any tanks, there aren't any armoured vehicles there because they'd simply be hit by drones. So the soldiers are moving forward in dismounted small groups and that means their progress is very, very limited. I spoke to a commander of a drone unit in the area, the Typhoon drone unit, Mikhail Okmichuk. So he says, you know, the war comes down to human resources, but the Russians they don't spare people. His opinion was that they are losing some of their most elite units.

13:21So the one thing that is changing at this moment in the war especially in the east is the technological race and what has happened since the start of the war. Ukraine by necessity has had to stay ahead of innovation and that's the thing which is most important because as soon as Ukraine comes up with something Russia then copies it and then multiplies it and is able to mass produce in a way that Ukraine isn't. What we're seeing now is that Russia is actually catching up technologically and may even be ahead of Ukraine. There's lots of talk about access to Mavic DJI drones, which are basically the eyes of the battlefield, these tactical reconnaissance drones.

13:56And what's happened is China has essentially cut off sales to Europe and Ukraine, while at the same time leaving those open to Russia. And in fact, according to President Zelensky, producing similar drones inside Russia. And the other word which is falling off Ukrainian in soldiers' lips is Rubicon, which is a new Russian drone unit. So tell me about Rubicon. Rubicon was first deployed against the Ukrainian incursion into Korsk in 2024. What we know is it reports directly to the Ministry of Defence. It's extremely well resourced. It's extremely well organised. And what people are saying is that unlike other drone units, they're given particular tasks.

14:34So one group is told to go after infantry. Another group is told to go after logistics. A third group is told to go after artillery. And what they're able to do is strike very deep. And they're able to do this by using so-called mothership drones that then deploy smaller ones, which are either controlled by fiber optic cables or using hard to intercept frequencies, which basically mean that they're impossible to intercept using electronic warfare methods. So I was speaking to the police chief in Konstantinovka, Dmitry Kediapkin. And he was painting this picture of this godforsaken town where very few people are left.

15:17There's maybe 8 ,000 people who come in during the day and then scamper out during the night. By the time of the curfew, which is set at 3 p.m., he just noticed how much these drones had basically taken control. Now, Ukraine has put its own elite drone units in there to try and counteract Rubicon's authority in the area. But still, it's very noticeable. And that's something that's new and has changed and is certainly very worrying for the Ukrainians. So, Oli, where does this leave us? We've been talking on the show repeatedly about ceasefire talks. We seem really far from that now. Yeah, I mean, it does almost seem that we're in parallel realities, especially when the peace process, it's almost like a Schrodinger paradigm in the sense that the peace process is both alive and dead at the same time.

16:04a front line that is moving but it's not breaking. We're seeing things like the Ukrainian diversionary raids far beyond the border, these successes here. At the same time, when you look at the map of movement in 2022, 2023, 2024, you'll see that the Russian movement is getting a lot less. In a normal democracy, if Russia was one, you'd ask why Putin was continuing. The problem is in Russia there aren't the feedback loops that there are in other countries. He won't step back from the Ukrainian war until he really has to. And in terms of how things are going to play out between Ukrainian collapse and things staying pretty stable, I feel we're going to be looking at some kind of uncomfortable fudge in between, not a victory or defeat.

16:51And the danger is that Mr Putin might be able to look at that and think that's enough for him to continue. Oli, thank you so much for your time. It's always a pleasure, Rosie.

17:12Ukraine has been thinking about its defense differently, too. Earlier this month, it launched a daring attack on Russian military aircraft. Using smuggled drones, it had painstakingly hidden inside Russia. On the most recent episode of The Weekend Intelligence, we go deep on this Operation Spider's Web, an intriguing tale of secrets and spycraft. You'll need to be a subscriber to Economist Podcasts Plus to listen. So become one.

18:01on the best reads of 2025, at least so far.

18:10Robert Guest, I'm deputy editor of The Economist. I'm recommending a book called Peak Human by Johann Norberg. It's about how golden ages come about throughout history. It argues, using examples from all of the past 3 ,000 years or so, that golden ages are more likely to happen when societies are open to people, to trade, to ideas that discomfort the mighty. It's a very unfashionable argument in today's world, but I'm pretty sure it's correct. I think listeners will enjoy it because Norberg's arguments are illustrated by a wealth of juicy details from 3 ,000 years of history, everything from the Abbasid Caliphate to the Roman Empire to the present day, and it really brings the message home.

19:02I'm Caitlin Tolbert, a culture correspondent for The Economist. And if you're looking for a more specific piece of history, I'm recommending The CIA Book Club by Charlie English. This is the tale of perhaps the most covert intelligence operation run by the CIA. Over three decades before the fall of the Berlin Wall in 1989, some 10 million books were smuggled into the Eastern Bloc, on boats, trains, trucks, and in baby nappies. They included the works of George Orwell, Virginia Woolf, and John Macare. I think listeners will be enlightened to hear about the bookish scheme, which has been called the best-kept secret of the Cold War.

19:46I'm Henry Trix, The Economist's US technology editor. And I'm sneaking in two books to the list about Sam Altman. They are The Optimist by Keech Hagee and Empire of AI by Karen Howe. Both paint Altman, the boss of open AI, as a Promethean figure able to conjure up world-changing ideas such as ChatGPT. But he also has a trustworthiness problem. While his remarkable storytelling ability enables him to raise pots of money, it's also repeatedly alienated his colleagues, which at times have thrown the future of AI into doubt. Hagee's book comes with his blessing, and Howe's is the unauthorized version, but both give readers juicy insights into the rivalries and philosophical feuds that are driving the rise of artificial intelligence.

20:50I'm John Fassman, a former co-host of The Intelligence and our senior culture correspondent. I'm recommending Buckley by Sam Tannenhaus, which is the best biography I've read in quite some time. It's about the 20th century's most influential American journalist, William F. Buckley. He founded the National Review in 1955, and more than any other non-politician, he shaped post-war American conservatism. But you don't have to be conservative to love this book. It's a lively, intimate account of a fascinating man. Buckley was as warm and generous and private as he was cutting and merciless on the page.

21:27And he was captivating on TV and radio. He loved arguing, but unlike so many other political writers, he always sought to persuade and delight, not to condemn or exile. He died in 2008 and American politics is a whole lot drearier without him.

21:47And I have one last book to add to this mix. Call Me Ishmael by Shaul Guo is a brilliant retelling of Moby Dick from the perspective of a young woman. And even if you weren't a fan of the arcane geekery on Wailing in Melville's original, in fact, even if you haven't read it, I really recommend this novel. It's as much about the inner voyage as a classic tale of daring do. In fact, I was so impressed by it, I also interviewed the author Xiaolu Guo for a recent episode of Drum Tower, our China podcast. After spending half a lifetime outside China, Xiaolu Guo hasn't only conquered the Western literary canon.

22:26She also has a unique perspective on the country of her birth. Do check it out, and you know the score. You need to be a subscriber to listen to Drum Tower. For the complete list of the 40 best books published so far this year, head to economist.com.

22:54That's all for this episode of The Intelligence. We'll see you back here tomorrow.

23:04Thank you.