Why Are So Many Older Gen Z Workers Not Seeking Jobs?
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What is the main topic discussed in this episode?
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What’s the labor-market mystery about older Gen Z workers not returning to jobs?
Here's your Money Briefing for Thursday, November 17th. I'm J.R. Whelan for The Wall Street Journal. Unemployment is still at near-record lows, but a big chunk of the working-age population isn't in the workforce. In fact, economists aren't sure where they are.
This really puts employers in a bind because they have fewer older workers, but they also have fewer workers in their early 20s. They're starting out in their career who are seen as investments, who you train, and you expect to remain at a company for years.
So where do these younger workers go? Our reporter Brian Mena has been going through the numbers.
How many early-20s workers are missing from the workforce compared with pre-pandemic levels?
He'll join us to unravel a labor market mystery after the break.
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Most workers who were laid off or displaced during the pandemic have returned to the workplace, with one notable exception, workers in their early 20s, often categorized as being part of Gen Z. So where are these workers who typically are in the early years of their career? WSJ reporter Brian Mena joins us. Hey, Brian, thanks for being here.
Thanks so much for having me.
So, Brian, how many people in this group are we talking about that aren't in the workforce?
Why didn’t higher wages and plentiful jobs lure early 20-somethings back like teenagers?
And how do those numbers compare to before the pandemic?
So we're talking about a shortfall of about 500,000 workers when you compare the workforce size in February 2020 to October 2022. So in February 2020, you had 15.3 million workers between the ages of 20 to 24. And then in October, you had a workforce size of about 14.8 million workers.
But it's well known that wages have risen sharply in the past year as the competition for workers has intensified. Why didn't that lure people in their 20s back into the workforce?
Interestingly, this tight labor market did do the trick in luring back teenagers into the workforce, specifically workers between the ages of 16 and 19. And so, you know, these workers are right in the biggest wage increases last year. And we saw participation not only recover to its pre-pandemic level, but increase. The average participation rate in 2021 was a high since 2009. And so clearly it shows that these higher wages, these plentiful job opportunities, and there were some instances of employers reducing the requirements. All these factors really did the trick in luring back these teenagers. But that wasn't the case for the early 20-somethings.
Is this unusual? Are we seeing it in other groups?
Yeah, so labor force participation is still lower than before the pandemic. And it's particularly lower for people over 55. And we know this because some of them took early retirements because of the fears surrounding the pandemic or the difficulty in finding suitable work at their stage in their careers. So it's not just 20-somethings, it's also older folks. But overall, you have participation that's still lower than before the pandemic.
Right, but clearly these 20-somethings aren't going into retirement. So let's try to get to the bottom of this.
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:00–0:35
2
What’s the labor-market mystery about older Gen Z workers not returning to jobs?
0:35–1:08
3
How many early-20s workers are missing from the workforce compared with pre-pandemic levels?
1:08–2:14
4
Why didn’t higher wages and plentiful jobs lure early 20-somethings back like teenagers?
2:14–4:04
5
Are more early-20s workers enrolling in school or is enrollment data telling a different story?
4:04–5:45
6
Could caregiving or waiting for better opportunities explain Gen Z’s absence from work?
5:45–6:55
7
How is Gen Z’s changed mindset about work affecting quitting patterns and employer expectations?
6:55–7:04
Speakers
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