Just like their forebears (the millennials who graduated from college between 2008 and 2012) it appears Gen Z is facing a labor-market shock of serious magnitude, spurred by the coronavirus pandemic and its attendant impact on the American economy, swelling the unemployment rolls while also disrupting the typical pipeline of internships and entry-level gigs that usually help students find permanent entry-level jobs.
In a report published Friday morning, Bloomberg illustrated the difficulties faced by college graduates, and students in their early 2020s, who have just seen their job market plans go up in smoke. Data released yesterday showed the number of Americans filing for the first time for unemployment benefits fell to 787k (870k exp), the lowest point since lockdowns began.
But even worse for young people, the unemployment rate for those between 20 and 24 climbed to 12.5% in September, the highest among all adults. Joblessness peaked at nearly 26% in April at the height of the pandemic, which was 4x the level two months earlier, a bigger jump than in any previous recession going back to 1940.
Following on from this, recent college graduates during the worst of COVID-19 saw unemployment peak at 20% in June, the highest of any age group with at least a bachelor’s degree.
That’s compared with a 13% peak during the years immediately after the financial crisis.
Young people without college degrees fared just as badly, as workers under the age of 20 saw an even larger spike in unemployment.
Bloomberg interviewed Tessa Filipczyk, a young recent college graduate, who hoped to kick-start her career in marine and coastal sciences. But after applying to dozens of jobs, and hearing nothing back, Flipiczyk has started babysitting for neighbors and doing whatever she can for cash.
For Tessa Filipczyk, this year was supposed to springboard her career in marine and coastal science. Graduating in June from the University of California at Davis, Filipczyk, 22, had applied for jobs related to ocean conservation, marine plant research and climate change advocacy. But none of those have panned out.
Now, she’s tutoring three children she used to babysit and it’s just eight hours of work a week.
“I was like ‘OK, I’m going to find a job; I’m going to work for a year and then I’m going to go to grad school,’” said Filipczyk, who’s living with her parents in Burlingame, California. “That all just got swept under the rug by Covid.”
And for students like Filipczyk who have missed the employment pipeline on their way out of college, does this mean their entire four years were a waste.
“There is a structure to the labor market – if you miss the entrance, how do you get back in?” said Julia Coronado, founder of MacroPolicy Perspectives LLC. “If you veer off the career path by necessity, how do you get back into the pipeline?”
That’s a huge problem for this generation of young people, who, in many cases, borrowed larger sums than their forebears as college tuition rates peaked during the 2010s, while the quantity of young people with college degrees also reached a new level of saturation. Economic research suggests that young people who struggle to get a job early in their career can see lower total earnings dog them for their entire professional lives.
Will we see a wave of these students enroll in non-target MBA programs three years from now, when they get tired of working retail and decide it’s time to give a real career one last shot?
Or better yet: maybe some of them will give writing code a try: “Getting rejected constantly and being in that emotion was pretty hard,” Ghadiyali said of her early post-grad challenges. “Learning how to write code was far easier.”