When cracks begin to show in the labor market, it is often young adults who feel the impact first. The Federal Reserve Bank of St. Louis recently reported that approximately 16% of young adults between the ages of 18 and 24 are not employed and not enrolled in high school or college, earning them the title of “disconnected youth.” These individuals, also known as “NEETs,” are opting out of the labor force due to discouragement with their economic circumstances.
A variety of factors contribute to the increasing numbers of disconnected young adults. Weak job networks, college degree requirements, lack of transportation, and limited access to childcare all play a role in deterring young individuals from joining the workforce. The St. Louis Fed’s findings indicate that the unemployment rate among 16- to 24-year-olds rose to 9.1% in July, a figure considered “typical” during relatively good economic times. Despite the unemployment rate falling below 7% in 2023, this decrease was reflective of a particularly strong labor market.
Labor economist Julia Pollak notes that the NEET trend is primarily seen among young men, with declining opportunities in traditionally male-dominated fields such as construction and manufacturing. In contrast, women’s enrollment in education and employment has shown positive trends over time. Nearly 70% of disconnected young adults have no more than a high school diploma, highlighting the impact of educational attainment on employment prospects.
While some young adults possess strong qualifications, they face challenges in securing employment opportunities. Korn Ferry’s report identifies a group labeled as the “new unemployables,” highly trained workers struggling to find suitable jobs. This situation has been exacerbated by a “perfect storm” that includes talent hoarding by employers and reduced job openings at the entry level. Despite a higher teen employment rate, individuals in their early 20s are experiencing difficulties in finding suitable employment.
As competition for job opportunities intensifies, candidates are advised to adopt proactive strategies to enhance their visibility to potential employers. Recommendations include reaching out to former colleagues or employers, engaging in informational interviews, and updating resumes with relevant keywords. Additionally, individuals are encouraged to consider opportunities for skills development, even if they entail taking on lower-level positions initially. By adopting a flexible approach and seeking continuous growth, young adults can position themselves for success in a challenging job market.
The rise of youth unemployment, particularly among disconnected young adults and the “new unemployables,” reflects ongoing challenges in today’s labor market. By understanding the contributing factors and adopting proactive strategies, individuals can navigate the job market more effectively and position themselves for long-term success.