When cracks begin to appear in the labor market, it is often young adults who bear the brunt of the impact. A recent report by the Federal Reserve Bank of St. Louis highlighted the alarming statistic that approximately 16% of 18- to 24-year-olds are neither employed nor enrolled in high school or college. These young individuals, often referred to as “disconnected youth” or “NEETs” (not in employment, education, or training), are opting out of the workforce due to a variety of reasons, including economic discouragement, weak job networks, college degree requirements, lack of transportation, and limited access to childcare.
In July, the unemployment rate for 16- to 24-year-olds rose to 9.1%, a figure that labor economist Alí Bustamante describes as “typical.” Despite the fact that the youth unemployment rate dipped below 7% in 2023, indicative of a strong labor market, Bustamante asserts that a rate of 9% is to be expected during relatively good economic times for younger workers. This trend is further emphasized by the fact that approximately 11.2% of young adults in the U.S. were categorized as NEETs in 2023, according to the International Labour Organization, highlighting the significant portion of young people who are being left behind.
Young men, in particular, are increasingly becoming detached from the labor force, as labor economist Julia Pollak notes. Traditional male-dominated fields like construction and manufacturing are seeing a decline in opportunities, while women’s enrollment in education and subsequent employment outcomes are on the rise. This disparity in job prospects is contributing to the growing trend of disconnected young adults, with nearly 70% of them possessing no more than a high school diploma.
A recent report from Korn Ferry highlights the emergence of a group known as the “new unemployables” – highly qualified individuals who are struggling to secure job opportunities in the current labor market. Talent hoarding by employers, coupled with a focus on talent mobility, has led to a dearth of available job openings even for well-qualified candidates. This has resulted in an uptick in stretches of unemployment, with the number of people unemployed for longer than six months increasing by 21%.
While the job market may seem challenging for young adults, there are proactive steps that can be taken to improve one’s chances of securing employment. Initiatives such as reaching out to former employers or colleagues, setting up informational interviews, and updating resumes with relevant keywords can help individuals stand out in a crowded job market. Instead of solely focusing on roles that offer promotions or raises, experts recommend pursuing a “career lattice” approach, which involves taking on lower-level positions to acquire valuable skills that will pay dividends in the future.
The issue of disconnected youth in the labor market is a concerning trend that requires attention and action. By addressing the root causes of this phenomenon and taking proactive steps to improve job prospects, young adults can position themselves for success in an increasingly competitive job market.
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