As graduation season approaches, many Gen Z-ers are finishing up high school, GEDs, job training programs or college, and they are looking for summer jobs or their first career opportunities. This might be exciting, but it isn’t easy. In fact, young workers typically have some of the highest rates of unemployment and today’s young workers are no exception. Young women’s (age 16-24) unemployment rate in April was 6 percent and young men’s was 6.9 percent – both close to double the overall rate.
Among young workers, some face particular challenges. Gen Z-ers of color and those with lower levels of educational attainment typically have higher unemployment rates. For example, young Black women’s unemployment rate was 6.9 percent last month, while young white women’s rate was 5.0 percent. Our recent research found that Gen Z women veterans struggle in the job market, facing significantly higher unemployment rates than nonveterans or their male veteran counterparts. And other communities that we don’t have monthly data for – like the LGBTQIA+ community, which accounts for 20 percent of Gen Z – are also likely to face higher unemployment.
How the economy is doing when you start your career really matters. Research shows that entering the job market during difficult economic times can impact your earnings for years to come – a fact Millennials know all too well from starting during the Great Recession. So by some measures today’s young workers are lucky – unemployment rates for young workers are at their lowest in 70 years. But times are uncertain – and that means it’s a tough moment to be starting out.
What challenges could impact Gen Z workers going forward? First off, the Federal Reserve just raised interest rates yet again. While this is likely to be the final time in the near future, their intentional efforts to soften the labor market over the last year have dampened employment prospects for the most marginalized workers, including young workers.
Additionally, Treasury Secretary Yellen informed Congress this week the U.S. could breach the debt ceiling as soon as June 1, meaning the government would not be able to meet all of its obligations, such as paying Social Security benefits or veterans benefits. Frankly, we don’t know what will occur if this happens, but many experts think it will send the global economy into a tailspin, with potential lifelong harm to workers, including young workers.
What’s astonishing is that this crisis is easily avoided. Congress has raised the debt ceiling nearly 80 times since 1960 and could easily do so again. However, House Republicans have passed a bill that would require hugely harmful cuts to essential programs – including programs critical for Gen Z like Pell Grants, child care, and more – in order to raise the debt ceiling, pitting the economic security of American families against the health of the global economy in a ridiculous but dangerous game of chicken.
Like the generations before them, Gen Z workers need and deserve an economy that provides them a foothold for a strong future. That means we need to raise the debt ceiling – without disastrous cuts – and the Fed must halt rate increases. Graduation should be a moment of celebration, not trepidation – and policy makers must ensure that’s the case.
Read our whole analysis of today’s Jobs Report on Twitter.
May means school's out soon! What does today’s #JobsReport mean for #GenZ-ers finishing up high school, GEDs, job training programs or college who are about to look for summer jobs or their first career opportunities? (1/10)— Dr. Kate Gallagher Robbins (@kfgrobbins) May 5, 2023