Gen Z college grads are bearing the brunt of today’s tricky job market

Gen Z college grads are more likely to be unemployed than the broader population: This isn’t normal. 

Nikki, a recent college graduate, has been struggling to find a job after completing her degree in biochemistry this year.

“Here I am, just jobless, applying to so many jobs, no one wants to hire me,” the 22-year-old said in a late August TikTok video.

She’s not alone. Over the past three years, many of the Gen Zers who saw a college degree as a ticket to a job have found themselves unemployed after graduation. While a cooling job market has made it harder for Americans of all ages to find work, young college grads are among the groups being hit the hardest.

This isn’t typical. Between 1990 and 2013, this group’s jobless rate was never higher than the overall unemployment rate.

However, according to data from the Federal Reserve Bank of New York, the unemployment rate of recent college graduates between the ages of 22 and 27 — the red line in the below graph — has been higher than the overall US unemployment rate every month since January 2021.

This means young college grads have been more likely to be unemployed than the broader population, even as the job market has returned to a more normal post-pandemic state over the past two years.

It’s largely due to bad luck: While older workers locked in jobs during the hiring spree of the Great Resignation, the youngest workers are entering the labor market at a time when hiring has slowed significantly, especially for jobs that require a college degree.

As of the most recent June data, the recent grad unemployment rate was 4.5% — higher than pre-pandemic levels but lower than the levels seen during the Great Recession.

“This is a labor market where if you have a job you like, you’re in a pretty good position,” Julia Pollak, the chief economist at ZipRecruiter, told B-17. “If you don’t have a job, if you’re a new grad, finding a job is actually unusually difficult.”

As Pollak alludes to, the entire labor market is not in the dumps. Layoffs remain low compared to historical levels, and working Americans have seen pay increases over the past few years that have outpaced inflation.

But if you don’t have a job and want one, you’re in a much tougher spot. As the newest members of the workforce, many young college grads have checked both of these boxes sometime over the last few years.

To be sure, recent college graduates still have a considerably lower unemployment rate than young people without a college degree — see the blue line in the above chart.

Gen Zers are entering the workforce at an unlucky time

While Americans were snatching up jobs when openings were at record levels in 2022, college students were studying for their exams. But now, some of these Gen Zers have graduated and are facing a labor market that’s undergone a significant hiring slowdown.

Monthly hires as a share of overall employment levels have been hovering at lows not seen since 2014, excluding a temporary dip in 2020.

In 2023, the hiring rate for jobs that typically require a college degree — among workers between age 20 and 29 — declined 20% year-over-year, according to ADP data. The overall hiring rate — across all jobs and ages — fell 15% over this period.

Additionally, aside from 2020 and 2021, the ratio of job openings to unemployed people — an indicator of job availability — is at its lowest level since 2018.

Additionally, hiring on LinkedIn was down in July compared to the prior year period in 19 of 20 industries measured, including financial services, retail, and healthcare.

“If you’re looking to find a job right now, it’s much tougher than it was two years ago,” Nick Bunker, the director of North American economic research at Indeed, told B-17.

In the years to come, it remains to be seen whether the US’s hiring slowdown will reverse or persist — forcing more Gen Zers to undergo long job searches. On Wednesday, the Federal Reserve issued its first interest rate cut in four years, which could provide the economy a boost and encourage businesses to eventually hire more workers.

Toward the end of her TikTok video, Nikki offered some advice for Gen Zers who are starting their senior years of college this fall.

“Don’t be like me, please — this is a cautionary tale,” she said. “Start looking for jobs, start looking for a Master’s program.”