Young jobseekers find it harder to find work despite a bustling job market: ‘It was brutal’

After receiving a graduate degree, Julianna Larock was bombarded with news about the strong job market and how much demand there was for skilled workers.

But this was not her reality.

Instead, she spent countless hours browsing networking sites like LinkedIn, attending mixers and other professional events, and generally searching the collective workplace for something that would fit her desire to find a job in the world of finance. All to no avail.

“Honestly, it was pretty brutal,” says Larock, 25, a Wilmington, Delaware, native who now lives in New York City. “It felt like a lot of work for little response, little reward.”

Fortunately, after spending a year of dashed hopes interspersed with some contract work to make it, Larock found full-time employment as an executive assistant and research associate for Acumen, a nonprofit impact investing firm in New York. . The firm was founded by Jacqueline Novogratz, sister of prominent investor Michael Novogratz, CEO of crypto-focused Galaxy Investment Partners.

While Larock is happy with her current station, getting there was difficult and the future feels uncertain.

“The depression and anxiety that came with the job search often spilled over into many of my other social relationships,” says the University of Delaware and Fordham graduate. “People can only be so supportive, and you just felt like every day was the same. And I really hate monotony.”

Larock’s experience comes at a time when, at least on the surface, the job market has continued to slide.

Since the start of 2023, nonfarm payrolls have expanded by about 4 million, continuing the growth that began after the Covid crisis. The unemployment rate has been held below 4% every month since January 2022, a strong performance not seen since the 1960s.

But concerns are growing that the labor market is beginning to show cracks. Larock’s cohort of workers—in their late teens and early 20s, including recent college graduates and other first-time entrants to the job market—seems particularly vulnerable.

According to the Bureau of Labor Statistics, the employment rate for all workers is at 3.6% of those counted in the labor force, just shy of a post-Covid era low. Before the pandemic, the employment rate was last below its current level in August 2014. It’s getting worse for younger workers.

“I’d often have people tell me that job quality or job search statistics aren’t really that bad, using that kind of leverage to invalidate everything I felt,” Larock says. “Whether that was what they wanted to do or not, and I don’t think it was, that was the impact it had. It made me feel worse.”

Welcome to the good-news-bad-news labor market, where the collective experience is positive, but not so much for individuals in particular groups.

“The good news,” Goldman Sachs economist Elsie Peng said in a recent note, “is that monthly job-finding rates remain at or above pre-pandemic rates for groups typically more vulnerable to weaker cyclical conditions , including workers without a college degree, workers in low-skilled industries, and workers who are foreign-born.”

“But the bad news is that new entrants to the labor market are doing less well,” Peng added.

The monthly rate of workers with little prior work experience finding work has declined, falling to 13% from a previous peak of 20%, according to Goldman data. While Peng characterized the job market as “generally strong,” she said there are “soft spots” that are particularly hitting “new entrants into the workforce.”

While the unemployment rate for the 20 to 24 age group is 3.5%, it is slightly higher than it was before the pandemic and is an area to watch out for in the softness in the labor market.

Molly Huang, a 22-year-old recent graduate of Penn State University with a degree in aerospace, aeronautical and astronautical engineering, is also finding challenges in navigating the situation—a process she began during her studies that has intensified now that she school is out.

“To be completely honest, it’s not a very good market. A lot of people I talk to agree that finding a full-time job for a new grad is kind of difficult,” says the Horsham, Pennsylvania, resident. . “I get interviews here and there, but nothing ever leads to an actual offer.”

Huang admits that her specialized degree adds a degree of difficulty to the search, so she is somewhat flexible about her approach.

“I’m trying to be pretty optimistic because a lot of people I know who get jobs don’t start until August, so I feel like I have a little time,” she said. “But at the same time, it feels like the clock is ticking.”

An age-old problem facing Huang and others in her shoes is the experience dilemma: Employers want to hire those with a certain background to work in their field, which is hard to come by for college graduates. young people out of practice.

There seems to be some good news on this front.

The rate of new hires as a percentage of existing employees rose to 2.8% in April, its highest level since October 2022, according to Vanguard, which uses proprietary data compiled from 401(k) program enrollments.

“In recent months, however, there has been a modest increase in employment among younger workers, while employment rates have been more flat for older workers,” said Vanguard investment analyst David Pakula.

At the same time, job website Indeed reports that less than a third of all postings on the site in April listed a specific number of years of experience, down from nearly 40% just two years ago. The reason, according to Indeed economist Cory Stahle, is more of a shift to “skills-first hiring” that places less emphasis on educational background and more on what prospective employees bring to the table.

That’s good news and bad news for young workers, some of whom had hoped expensive degrees would give them a foothold.

“The overall job market has really changed a lot since 2021 and ’22, so I think graduates are entering a job market that is much more challenging than it has been in recent years,” said Joanie Bily, chief. workforce analyst at Employbridge, an industrial staffing firm.

As healthy as the top-line numbers have looked since 22 million workers were laid off in the early days of the pandemic, Bily points out that most of the recovery has come in healthcare, leisure and hospitality and government jobs.

The financial field, where Julianna Larock works, actually has a higher unemployment rate now than before the pandemic – 2.7% compared to 1.7% in February 2020.

Also, the balance of household employment has gone to part-time jobs, which have increased by more than a million over the past 12 months, while full-time employment has fallen by more than half a million, according to the Bureau of Statistics. of work. .

“Although it’s still a relatively tight labor market, I think we’re seeing a weakening in the overall U.S. labor market, and indeed we’ve seen that decline since 2022,” Bily said. “What we’re seeing with graduates is that they’re looking to enter the workforce and start their careers, and a lot of them are also taking jobs in leisure and hospitality because that’s where the jobs are.”

Ethan Mariano will double major in political science and international relations from Gettysburg College to graduate later this year from American University in Washington, D.C. He needs a job while studying so he can afford living expenses, but would like a position that could serve as a springboard to work in foreign policy analysis at the State Department or a think tank.

So far, no luck.

“A lot of jobs they say, regardless of whether it’s entry level, we need two years of experience. Others say you need an internship on Capitol Hill, which is difficult because those who can afford to live down in DC take the practice,” says Mariano, 22, of Hazleton, Pennsylvania. “It’s been hard.”

Despite the obstacles, he remains optimistic, while still knowing that obtaining a graduate degree will probably be required before he can truly settle down.

“Yes, I’m optimistic. Maybe it’s the new naivety in me, but I think I’ll find something,” says Mariano. “I just need to get my foot in the door.”