It’s tough for young Americans to find a job right now. Blame ‘the Great Stay’ | CNN Business

Washington
CNN
 — 

Over the past two years, Kirsten Staple has submitted more than 500 job applications. At first she applied to jobs related to her 2022 bachelor’s degree in psychology from the University of Texas at San Antonio.

But that didn’t land her any positions, so she recently started applying for anything full-time while living with her parents in El Paso, Texas, including at grocery stores. She still hasn’t found a job.

Staple’s plight highlights the unusually difficult situation of young Americans trying to kick-start their careers, even as the broader US economy remains in good shape.

Unemployment remains historically low, employers continue to hire at a brisk pace and there are still more job openings than at any point before the Covid-19 pandemic, according to government figures that economists and policymakers pore over to understand the labor market.

But other data shows a tougher reality for younger job seekers: The share of employed Americans aged 20-24 out of the total working-age population declined the most of any age group in September from a year earlier, according to Labor Department data, followed by a slightly smaller decline among those aged 25-34. The share of job seekers between 18 and 24 who said they took more than a year to find a job tripled in the third quarter of this year compared to late 2022, according to ZipRecruiter survey data provided to CNN.

Economists say workers who experience career setbacks so early on face potential losses in lifetime earnings, in addition to missing out on valuable learning experiences in the first few years of a career.

“This all makes me feel behind,” Staple said. “Any money that I receive comes from my parents, or if I get money for my birthday or for Christmas. That’s still very, very limited.”

In 2022, job openings hit a record high, and workers felt so confident about their ability to find new jobs that they quit at a historically fast pace — a result of the US economy roaring back after the pandemic.

Two years and an aggressive interest-rate-hiking campaign from the Federal Reserve later, the US economy now resembles something closer to a pre-pandemic normal. That’s a good thing; the US economy has so far avoided a recession, a major risk while the Fed worked to bring down inflation.

Indeed, the job market overall remains in decent shape. But a look under the hood reveals factors preventing younger folks from getting their foot in the door.

“The headline figures from the jobs report still look pretty good, but the amount of churn, hiring, job switching — actual labor market activity — is much, much slower than those top line figures suggest,” said Julia Pollak, ZipRecruiter’s chief economist. “We’re in ‘the Great Stay,’ where companies are being very slow to hire, very slow to fire and job switching is also unusually slow.”

The rate at which workers are hired for a job fell in August to the lowest level since October 2013, excluding the initial economic disruption in the beginning of the pandemic, and matching the reading seen in June. Meanwhile, the rate at which workers quit their jobs declined in August to levels not seen since 2015, also excluding the steep decline in early 2020 because of the pandemic.

Employers have put their hiring plans on hold over uncertainty about the outcome of the upcoming US presidential election as they wait for interest rates to come lower, CNN previously reported.

Everyday Americans are always at the mercy of the economy — whether it’s navigating difficulties such as high inflation and a recession, or a red-hot job market that benefits workers. Having a tough time landing that first job, in part because of broader economic forces, can have lasting consequences.

“For young workers, their first few years out of school are very formative for their careers. Not only is that a time when they are building their network and meeting other people, but they’re also developing their skills,” said Daniel Zhao, lead economist at Glassdoor. “So, getting a setback early on in your career can have lasting impacts.”

Zhao pointed to Millennials who graduated from college during the Great Recession and suffered from lower earnings because they were “scarred by that experience,” so they were less likely to switch jobs.

“Job security became important for that cohort, but a lack of job switching means employees get stuck in a job where it might not be an ideal fit, or they might not be paid at market rate, but because they’re risk averse, they’re sitting tight in that suboptimal situation,” he said.

Jonathon Courtney graduated from the University of Houston in August with a master’s degree in applied economics and still hasn’t found a permanent full-time role related to his education, despite applying to about 200 jobs over the past year. The 23-year-old, who lives in Houston, said his efforts have resulted in just five interviews.

Courtney said he sometimes wondered if the effort he put in to getting a graduate degree was worth it but eventually realized the situation is out of his control.

“I don’t think it was a waste to go to school and learn everything I’ve learned. I see ways to apply it in real world,” Courtney told CNN. “But I do feel like a victim of circumstance to be starting in this job market.”

Even for young Americans who’ve already started their careers, there’s still the possibility of being laid off.

Catherine Dugoni, 26, got laid off from her public relations job a year ago, and she hasn’t found a job since, despite applying to hundreds of jobs and doing about 60 interviews. She moved back in with her parents in Sacramento, California, from San Francisco because she could no longer afford to pay the rent.

“It’s definitely taken a toll on my mental health,” Dugoni said. “It’s definitely been defeating at times, especially when you feel like you’re just sending out applications into a void, and even when you’re networking, that isn’t always a guarantee that it’ll lead to even an interview.”