:max_bytes(150000):strip_icc()/GettyImages-1667944748-9be9fc4237264b14b8fd302f80d43a34.jpg "Why Gen Z Can’t Find Work—and How It Could Shape Their Future")
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Key Takeaways
- Recent grads are facing a more challenging job market than the broader workforce, which could hint at tougher conditions ahead for this cohort.
- Historically, entering the job market during a downturn can lead to a significant decline in earnings, as well as poorer health and mortality outcomes for years afterwards.
Young people are struggling to find jobs, and that could have negative consequences for them long after they land a new role.
According to data from the Federal Reserve Bank of New York, the unemployment rate for recent college graduates was 4.8% as of June 2025. In contrast, the unemployment rate for all workers was 4.0%.
On his Substack, Paul Krugman, economist and Nobel Laureate, pointed out that a higher unemployment rate for recent college grads is atypical and could be a indicator of worse times ahead for this cohort.
What This Means For You
As companies slow hiring due to uncertainty, new grads may are having a hard time finding a job. In order to be more competitive on the labor market, experts suggest staying flexible in the job search and not being too narrowly focused on a particular role or industry.
“What we’re looking at now isn’t the worst job market college graduates have ever seen. It is, however, the worst such market compared with workers in general that we’ve ever seen, by a large margin,” wrote Krugman.
While some have speculated that this trend could be due to businesses using AI to do the work of entry-level employees, experts like Chris Martin—a lead researcher for Glassdoor—have suggested that companies may be reducing hiring due to uncertainty about economic policies like tariffs.
“I think it’s too soon to tell from the data whether AI is driving this downturn for new grads in particular. I’m not convinced that it is…” said Martin in an August interview with Investopedia.
And although the economy isn’t in a recession right now, previous studies have shown that young people who enter the labor market during a downturn, or a period of high unemployment, can experience lower earnings as well as worse marriage and health outcomes for years afterwards.
“A growing body of research has shown that entering the labor market in a recession leads to losses in earnings, wages, and employment that persist for about 10 years,” wrote economists Hannes Schwandt and Till Von Wachter, in an issue of the NBER reporter, a quarterly periodical by the National Bureau of Economics Research.
For young people currently seeking a job, it’s not impossible to find a one—but it may be harder and require more effort. Martin suggested people expand their job search beyond the specific role or industry they want to work in, and focus on landing a job in a field that’s continuing to hire.
“Even if you’re a software engineer or you want to be a financial analyst, you may not need to work for a tech company or an investment bank to get your career started in those fields,” said Martin. “For example, there’s been a lot of growth in jobs in health care over the past couple of years, and health care companies need software engineers and financial analysts.”
