Why the Strong Labor Market Is Weak for Many 20-Somethings
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Listen at schwab.com slash washingtonwise.
Here's your Money Briefing for Monday, July 22nd. I'm J.R. Whelan for The Wall Street Journal. Unemployment is at near historic lows, but one group is having more trouble than most in finding work. People in their 20s with bachelor's degrees. Some have applied for hundreds of jobs and have yet to land a position.
They're at the moment where they're trying to crack the professional job market while the rest of the workforce is coming down from post-pandemic job hopping, what people were calling the great resignation. And so now there are fewer entry-level openings because that job hopping has slowed down.
We'll talk to Wall Street Journal reporter Ray Smith about how 20-somethings are staying on track despite the labor market challenges after the break.
Listen at schwab.com slash washingtonwise.
Which 20-somethings are struggling in today’s labor market and why?
Hiring is down substantially for young workers with bachelor's degrees. Wall Street Journal reporter Ray Smith joins me. Ray, help us pinpoint this. Which age group are we talking about?
Sure. In general, we're talking about all college-educated workers, but especially those early in their careers, recent graduates, people in their 20s.
Unemployment is still at its lowest level in decades, and we've seen workers command substantial pay raises recently. Why has the job market become so challenging for people, particularly in their 20s?
One reason is that many people in their 20s, they're at the moment where they're trying to crack the professional job market while the rest of the workforce is coming down from post-pandemic job hopping. There was a lot of job hopping, what people were calling the great resignation. And so now there are fewer entry-level openings because that job hopping has slowed down.
But younger workers would likely be lower on the income scale than other workers. Wouldn't that make them more valuable to companies?
You would think that. But the bottom line is that other workers aren't leaving.
How did post-pandemic job-hopping reduce entry-level openings for recent grads?
And there's something economists are calling the big stay. What that means is basically now that the job market has tightened, those lofty pay raises that people would get from switching jobs or starting jobs even, where you would get sort of incentives to move to somewhere and you would get this high sort of pay bump, more people are holding on to their jobs. And so that lack of turnover... installing hiring even more.
You spoke to several people who are having trouble finding work, including one who applied for more than 400 jobs. Another one applied for 70.
How have hiring rates for bachelor’s-degree roles changed since 2019?
What did they tell you about their experience?
They told me how dispiriting it was. They had felt like they basically invested all this money and time in getting a degree, which is what they were told to do, you know, in order to get themselves a job in their field. And then they graduate and it's crickets. And they told me they went through self-doubt and contemplated taking jobs at like retail stores and fast food restaurants even. One, an English major told me he ended up getting a job as a substitute teacher. And then when that ended, he now works as a cook and a dishwasher at a local cafe in Chicago. You know, right now he's considering going back to school, to grad school, in the hopes that maybe by the time he finishes, the job market will be better.
How does this job market for 20-somethings compare to what it was like before the pandemic?
It's interesting that you ask that because hiring for roles that usually require a bachelor's degree in general, they've dropped below 2019 rates.
What is the 'big stay' and how does it keep younger workers from landing jobs?
And that drop has been even steeper for 20-somethings.
How have companies shifted their investments? And how has that affected people early in their careers trying to find work?
One of the shifts in investments has been in companies devoting more resources to AI, in particular generative AI.
How are companies’ investments in generative AI affecting entry-level hiring and career choices?
That's a technology that many fear could shrink the need for traditionally high-demand workers, such as coders and data analysts and bookkeepers. But that's also going to probably affect a lot of entry-level jobs that college graduates are applying for or would have applied for pre-AI jobs.
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:01–2:01
2
Which 20-somethings are struggling in today’s labor market and why?
2:01–3:08
3
How did post-pandemic job-hopping reduce entry-level openings for recent grads?
3:08–3:41
4
How have hiring rates for bachelor’s-degree roles changed since 2019?
3:41–4:43
5
What is the 'big stay' and how does it keep younger workers from landing jobs?
4:43–5:06
6
How are companies’ investments in generative AI affecting entry-level hiring and career choices?
5:06–6:45
7
What were recent job-seekers’ experiences applying to hundreds of positions?
6:45–7:20
Speakers
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