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STEM degrees have long been crowned as the most employable academic paths, marketed as the unshakable pillars of career success and economic stability. But new job market data is rapidly dismantling that belief. According to the Federal Reserve Bank of New York (2025), unemployment for computer engineering stands at 7.5%, and for computer science, 6.1%, figures that cast doubt on the supposed invincibility of these once-revered disciplines. Meanwhile, the traditionally dubbed “soft” majors—philosophy, art history, and even nutritional sciences- are now outperforming STEM in employment outcomes, challenging entrenched academic hierarchies.This reversal is no anomaly, it is a signal. As AI takes over routine technical work and employers increasingly value adaptability, ethical judgment, and interdisciplinary thinking, the job market is undergoing a quiet yet seismic shift. The liberal arts, long dismissed as impractical, are now aligning with what the economy increasingly seeks: not just technical skills, but human insight.
Technical degrees face higher unemployment rates
A startling analysis was unearthed by the Federal Reserve Bank of New York recently, based on 2023 US Census data, that reveals that computer engineering graduates face 7.5% unemployment rate, while computer science graduates report 6.1%, figures notably higher than the national average for recent college graduates. These rates eclipse many liberal arts disciplines, moving against age-old beliefs. However, paradoxically, degrees such as nutritional sciences (0.4%), art history (3%), and philosophy (3.2%) demonstrate lower unemployment rates. Even finance and economics, often regarded as elite, career-oriented profiles, register 3.7% and 4.3% unemployment rates, respectively, still outperforming some of the highest-paying STEM disciplines.
Broader labour trends signal rising pressure
The job market for young graduates is showing increasing signs of strain. According to the New York Fed’s April 2025 report, the unemployment rate for recent college graduates rose to 5.8% in March 2025, up from 4.6% the previous year. Additionally, Gen Z households experiencing unemployment surged by nearly 32% year-over-year in February, as per the US Census Bureau.The job market is grappling with mounting signs of strain. According to the Federal Reserve Bank’s data, the unemployment rate for recent college graduates has skyrocketed to 5.8% in March 2025, up from 4.6% the previous year. Furthermore, the trend suggests a systemic mismatch between educational focus areas and actual market absorption capacity. While student interests continue to swell in tech-related domains, the hiring market appears to be shifting this criterion.
What’s causing this shift?
The job market has never been a straight line, it has always demonstrated a light and dark patch. Skills and courses once regarded as “not employable” are gaining momentum in the present scenario. What is at backstage of this transformation?
- Oversupply in STEM graduates: With a surge in enrollment in computer science and engineering, the number of qualified graduates has transcended the available entry-level jobs, diluting job prospects in a once-robust sector.
- AI and automation replacing routine technical work: Emerging technologies are automating foundational coding, analysis, and design tasks, cutting off demand for newly minted technical professionals.
- Rising STEM unemployment rates: According to the Federal Reserve Bank of New York, unemployment for computer engineering and computer science graduates stands at 7.5% and 6.1%, respectively, well above several liberal arts fields.
- Liberal Arts majors showing greater job resilience: Graduates in philosophy, art history, and nutrition report significantly lower unemployment, some as low as 0.4%, challenging assumptions about “employable” degrees.
- Shifting employer priorities: Modern employers are placing a premium on interdisciplinary thinking, ethical judgment, communication skills, and cultural awareness, traits often fostered in the humanities.
- Broader economic volatility: A 32% year-over-year rise in unemployment among Gen Z households (US Census Bureau, 2025) points to larger structural changes that are altering the equation between education and employability.
Indian trends echo the global realignment
Indian students are also facing these unprecedented challenges exhibited by a volatile job market. A significant decline in traditional engineering enrolments is emerging, now dipping to 24.5%, while 42.9% of students are opting for computer science and mathematics, according to internal education estimates.
The growing relevance of the Humanities and Liberal Arts
Contrary to the long-cherished perceptions, liberal arts disciplines are now being rewarded for their inclination with the evolving needs of a digitally interconnected world. The industries are changing their face at the blink of an eye, thanks to artificial intelligence. In a world driven by Artificial Intelligence, soft skills are ruling the realm. Hence, the demand for uniquely human skills are at rise, such as ethical reasoning, creativity, critical thinking, and cross-disciplinary understanding, is growing. These are competencies that traditional STEM curricula often overlook, but which humanities-based education fosters by design.The shift is not just academic; it’s pragmatic. As organizations grapple with the ethical and societal implications of emerging technologies, the ability to contextualize innovation within broader human frameworks is becoming a competitive advantage.
A new equation for career preparedness
The narrative that STEM guarantees success is being challenged and redefined. While technical knowledge remains essential, it is no longer a standalone passport to job security. The latest data from the Federal Reserve Bank of New York and the US Census Bureau suggest that degrees once shrugged off as impractical are now bestowing greater flexibility in a world where technology evolves faster than job roles can be created.Picking a college major today is less about looking for the heaviest pay cheque and more about preparing for a fluid future. As the lines between disciplines blur and the workplace demands broader skill sets, a balanced educational strategy, one that values both hard skills and human insights, may prove to be the most future-ready path of all.
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