Young job seekers are finding it tougher to find employment, despite a bustling labor market: ‘It was brutal’

Monday, June 10, 2024

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

But that wasn’t her reality.

Instead, she spent untold hours browsing through networking sites such as LinkedIn, attending mixers and other professional events, and generally scouring the collective workplace for something that would fit her desire to land a job in the world of finance. All to no avail.

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

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

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

“The depression and the anxiety that was coming from the job search oftentimes bubbled over into a lot of my other social relationships,” the University of Delaware and Fordham graduate says. “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 jobs market has continued to glide along.

Signs of weakness

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

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

The hiring rate for all workers is at 3.6% of those counted in the labor force, just off the low of the post-Covid era, according to the Bureau of Labor Statistics. Prior to the pandemic, the hiring rate was last below the current level in August 2014. It’s getting worse for younger workers.

“I oftentimes would have people telling me the job quality or job search statistics aren’t really that bad, using that kind of leverage to invalidate everything I was feeling,” Larock says. “Whether that’s what they meant 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 as 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 who are usually more vulnerable to weaker cyclical conditions, including workers without a college degree, workers in low-skill industries, and workers who are foreign-born.”

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

The monthly rate of workers with little previous work experience getting jobs has plunged, falling to 13% from its previous peak of 20%, according to Goldman data. While Peng characterized the jobs market as “strong overall,” she said there are “soft soft spots” that are particularly hitting “new entrants to the workforce.”

While the unemployment level for the 20-to-24 age group is at 3.5%, it’s slightly higher than it was pre-pandemic and is one area to watch for softness in the labor market.

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

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

Huang acknowledges that her specialized major adds a degree of difficulty to the search, so she’s being somewhat flexible about her approach.

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

Getting the experience

One age-old quandary Huang and others in her shoes have to face is the experience dilemma: Employers want to hire those who have some background working in their field, which outside of internships, is hard to get for new grads.

There does appear to be some good news on that front.

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

“In recent months, though, there has been a modest uptick in hiring among younger workers, while hiring rates have been flatter for older workers,” said Vanguard investment analyst David Pakula.

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