Putting the Gen Z Unemployment Rate in Perspective
There are more than 2 billion people in the Generation Z age range globally. These individuals, born between 1997 and 2009, represent about 30% of the total global population—and it’s predicted that by 2025, Gen Z will make up about 27% of the workforce.
Due to the global pandemic, unemployment has been on the rise across the board—but Gen Z has been hit the hardest. This chart, using data from the OECD, displays the difference between the unemployment rate for Gen Zers and the rate for older generations.
Note: The OECD defines the ‘unemployed’ as people of legal working age who don’t have work, are available to work, and have taken steps to find a job. The final figure is the number of unemployed people as a share of the total labor force.
The Generation Gap: Gen Z Unemployment
Compared to their older working-age counterparts, Baby Boomers, Gen X, and Millennials (Gen Y)—the most recent 2020 data shows that Gen Z has an unemployment rate of nearly 2x more in almost every OECD country.
|Country||Unemployment Rate (Gen Z)||Unemployment Rate (Millennial, Gen X, Boomer)|
|🇨🇿 Czech Republic||8.0%||2.3%|
|🇰🇷 South Korea||10.5%||3.6%|
|🇳🇿 New Zealand||12.4%||3.3%|
|🇬🇧 United Kingdom||13.5%||3.2%|
|🇺🇸 United States||15.1%||7.1%|
Note: For the purposes of this article, we are only considering the Gen Zers of legal working age—those born 1997-2006. The rest—Baby Boomers, Gen X, and Millennials—are those born between 1946–1996.
The timing for the youngest working generation could not be worse. Gen Z is just beginning to graduate college and high school, and are beginning to search for work and careers.
Gen Z is also an age group that is overrepresented in service industries like restaurants and travel–industries that were equally hard hit by the pandemic. In the U.S., for example, around 25% of young people work in the hospitality and leisure sectors. Between February and May 2020 alone, employment in these sectors decreased by 41%.
Countries like Spain are facing some of the biggest headwinds among OECD countries. The country already has a high unemployment rate for those aged 25-74, at 14%. But the unemployment rate for Gen Z is more than double that, at over 38%.
Implications For the Future
While it may be true throughout history that this age group is often less employed than older cohorts, the share of labor held by those aged 15-24 dropped significantly in 2020.
Note: This chart represents the data from G7 countries.
In terms of their future employment prospects, some economists are anticipating what they call ‘scarring’. Due to longer periods of unemployment, Gen Z will miss out on formative years gaining experience and training. This may impact them later in life, as their ability to climb the career ladder will be affected.
Starting out slower can also hit earnings. One study found that long periods of youth unemployment can reduce lifetime income by 2%. Finally, it is also postulated that with the current economic situation, Gen Zers may accept lower paying jobs setting them on a track of comparatively lower earnings over their lifetime.
Overall, there are many future implications associated with the current unemployment rate for Gen Zers. Often getting your foot in the door after college or high school is one of the hardest steps in starting a career. Once you’re in, you gain knowledge, skills, and the oh-so-coveted experience needed to get ahead.
The Kids are Alright?
One positive for Gen Z is that they have been found to be more risk averse and financially conscious than other generations, and were so even prior to COVID-19. Many of them were children during the 2008 Recession and became very cautious as a result.
They are also the first digital generation— the first to grow up without any memory of a time before the internet. Additionally, they have been called the first global generation. This could mean that they pioneer location-independent careers, create innovative revenue streams, and find new ways to define work.
The Top Google Searches Related to Investing in 2022
What was on investors’ minds in 2022? Discover the top Google searches and how the dominant trends played out in portfolios.
The Top Google Searches Related to Investing in 2022
It was a turbulent year for the markets in 2022, with geopolitical conflict, rising prices, and the labor market playing key roles. Which stories captured investors’ attention the most?
This infographic from New York Life Investments outlines the top Google searches related to investing in 2022, and offers a closer look at some of the trends.
Top Google Searches: Year in Review
We picked some of the top economic and investing stories that saw peak search interest in the U.S. each month, according to Google Trends.
|Month of Peak Interest||Search Term|
|February||Russian Stock Market|
|December||Interest Rate Forecast|
Data based on exact searches in the U.S. from December 26, 2021 to December 18, 2022.
Let’s look at each quarter in more detail, to see how these top Google searches were related to activity in the economy and investors’ portfolios.
The start of the year was marked by U.S. workers quitting their jobs in record numbers, and the effects of the Russia-Ukraine war. For instance, the price of crude oil skyrocketed after the war caused supply uncertainties. Early March’s peak of $125 per barrel was a 13-year high.
|Date||Closing Price of WTI Crude Oil
|January 2, 2022||$76|
|March 3, 2022||$125|
|December 29, 2022||$80|
While crude oil lost nearly all its gains by year-end, the energy sector in general performed well. In fact, the S&P 500 Energy Index gained 57% over the year compared to the S&P 500’s 19% loss.
The second quarter of 2022 saw abnormal house price growth, renewed interest in value investing, and a bitcoin crash. In particular, value investing performed much better than growth investing over the course of the year.
|Index||Price Return in 2022|
|S&P 500 Value Index||-7.4%|
|S&P 500 Growth Index||-30.1%|
Value stocks have typically outperformed during periods of rising rates, and 2022 was no exception.
The third quarter was defined by worries about a recession and inflation, along with interest in the rising U.S. dollar. In fact, the U.S. dollar gained against nearly every major currency.
|Currency||USD Appreciation Against Currency
(Dec 31 2020-Sep 30 2022)
Higher interest rates made the U.S. dollar more attractive to investors, since it meant they would get a higher return on their fixed income investments.
The end of the year was dominated by OPEC cutting oil production, high layoffs in the tech sector, and curiosity about the future of interest rates. The Federal Reserve’s December 2022 economic projections offer clues about the trajectory of the policy rate.
The Federal Reserve expects interest rates to peak in 2023, with rates to remain elevated above pre-pandemic levels for the foreseeable future.
The Top Google Searches to Come
After a year of volatility across asset classes, economic uncertainty remains. Which themes will become investors’ top Google searches in 2023?
Find out how New York Life Investments can help you make sense of market trends.
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