Why are Gen Z facing higher unemployment rates compared to previous generations?

Given that Gen Z (born approximately 1997-2012) entered the workforce during a unique confluence of global instability—including the pandemic’s immediate aftermath, ongoing economic uncertainty, accelerating automation/AI disruption, and shifting labor market demands—why are they experiencing significantly higher unemployment and underemployment rates compared to previous generations like Baby Boomers, Gen X, and even Millennials at similar career entry points? Specifically, what factors beyond individual skills or effort contribute to this disparity, such as structural economic changes, mismatched education systems, the prevalence of gig work without benefits, lingering pandemic aftershocks, delayed career progression milestones, and exclusionary hiring practices? How do these systemic barriers collectively disadvantage Gen Z’s ability to secure stable, well-compensated employment opportunities compared to earlier generations at comparable ages?

Gen Z is facing higher unemployment rates compared to previous generations due to a confluence of economic, educational, technological, and societal factors:

1. Impact of COVID-19 Pandemic: Gen Z entered the workforce or began job searches during the pandemic, which caused unprecedented economic disruption. Lockdowns reduced service-sector hiring, a major employer for young workers, and economic volatility led employers to freeze hiring or prioritize experience over entry-level roles.

2. Skills Mismatch and Educational Shifts: There is a growing disconnect between academic curricula and labor market demands. Many Gen Z graduates lack in-demand technical skills (e.g., data analysis, coding, AI literacy), while entry-level positions increasingly require prior experience—a catch-22 for new entrants. Additionally, trends like "degree inflation" (employers requiring bachelor’s degrees for roles previously held by high-school graduates) lower accessibility.

3. Automation and AI Disruption: Automation threatens jobs Gen Z traditionally entered, such as retail, administrative support, and transportation. Routine tasks are increasingly automated, disproportionately affecting low-skilled roles common for youth. Simultaneously, rapid tech advancements demand continuous reskilling, which Gen Z struggles to access affordably.

4. Underemployment and Gig Economy Overreliance: Many Gen Z workers are trapped in part-time, temporary, or gig work (e.g., food delivery, freelance) with unstable hours, low wages, and no benefits. This underemployment skews unemployment data and limits career progression. Gig platforms also lack worker protections, leading to higher turnover and job insecurity.

5. Economic Inequality and Wealth Gaps: Stagnant wages and rising costs of living (housing, education, healthcare) force Gen Z to take on debt-limiting investments in skill development. Previous generations benefited from higher wages relative to costs and stronger social safety nets, making early-career stability more achievable.

6. Climate Change and Green Transition Shifts: Industries like fossil fuels and traditional manufacturing are declining due to environmental policies, displacing young workers in certain regions. The green economy creates new opportunities but requires specialized training that is not yet widely accessible, exacerbating unemployment in hard-hit areas.

7. Globalization and Offshoring: Remote work and global outsourcing enable companies to hire cheaper labor internationally, reducing local entry-level jobs. Gen Z competes with a global talent pool for positions that previous generations did not.

8. Attitudes Toward Work and Corporate Expectations: Unlike previous generations, Gen Z prioritizes purpose, flexibility, and mental well-being. This mismatch with traditional corporate cultures leads to higher job turnover and slower employment integration. Employers often perceive this as a lack of commitment, reducing hiring.

9. Regional and Demographic Variations: Unemployment is unevenly distributed; rural areas and regions with declining industries face higher joblessness. Gen Z also contends with ethnic disparities, systemic biases in hiring, and discrimination that disproportionately affect minority youth.

10. Policy and Infrastructure Gaps: Governments have historically underinvested in youth employment programs, vocational training, and digital literacy initiatives. Inadequate affordable childcare and transportation further limit access to jobs for low-income Gen Z members.

These factors intertwine to create structural barriers that were less pronounced for past generations, making Gen Z’s transition to stable employment particularly challenging. Addressing these requires systemic changes, including updated education systems, targeted reskilling programs, and equitable economic policies.