Challenges Faced by Young Adults in the Labor Market

In the current labor market, young adults are facing significant challenges that are affecting their employment opportunities. A recent report by the Federal Reserve Bank of St. Louis reveals that around 16% of 18- to 24-year-olds are not employed or enrolled in high school or college, earning them the title of “disconnected youth.” These individuals, often referred to as NEETs (not in employment, education, or training), are choosing to stay out of the labor force due to various reasons, including discouragement by their economic status, lack of job networks, strict college degree requirements, limited access to transportation, and inadequate child care facilities.

According to labor economist Alí Bustamante, the unemployment rate among 16- to 24-year-olds reached 9.1% in July, which is considered a typical figure for this demographic during relatively stable economic times. While the U.S. Bureau of Labor Statistics reported a decrease in youth unemployment to below 7% in 2023, this reduction was primarily a result of the booming labor market during that period. Despite positive trends, approximately 11.2% of young adults aged 15 to 24 in the U.S. were classified as NEETs in 2023, indicating a significant portion of the youth population is not engaged in productive activities.

Economist Julia Pollak notes that the NEET trend primarily affects young men, with declining opportunities in traditional male-dominated sectors like construction and manufacturing contributing to their disengagement from the labor market. On the other hand, women have shown improvements in education and employment outcomes, indicating a narrowing gender gap in the job market. The St. Louis Fed’s research further reveals that nearly 70% of disconnected young adults have not completed education beyond high school, signaling a need for skill development and training programs to bridge the qualification gap.

A recent report by Korn Ferry highlights the emergence of a new category of job seekers known as “new unemployables,” comprising highly qualified individuals who struggle to secure employment opportunities in the current market. This phenomenon has been attributed to employers holding onto existing talent, limiting job mobility and reducing new hires, particularly at the entry level. Despite a rise in teen employment, early 20-somethings are experiencing challenges in finding suitable jobs, with the labor force participation of 20- to 24-year-olds declining significantly during the pandemic and continuing to lag behind post-pandemic recovery.

As job seekers navigate these challenging conditions, it is essential to adopt proactive strategies to improve their prospects. According to David Ellis of Korn Ferry, reaching out to former employers and colleagues, updating resumes with relevant keywords, and engaging in informational interviews can enhance visibility and networking opportunities. Additionally, considering lateral career moves to acquire new skills and experience, known as a “career lattice,” can be beneficial in the long run for career growth and development.

The challenges faced by young adults in the labor market require a multifaceted approach that addresses educational barriers, gender disparities, and the evolving job market dynamics. By equipping themselves with the necessary skills, staying resilient in the face of adversity, and leveraging available resources, young adults can navigate the complexities of the labor market and achieve sustainable career success.