Washington
CNN
—
Cam Tangalakis-Lippert has fielded hundreds of job applications since she was fired from her software engineering gig at Twitch a year ago. The 25-year-old Sacramento resident told CNN she was a few months away from running out of money.
Tangalakis-Lippert is one of millions of Americans in their 20s who are struggling to find work these days. In 2024, businesses have been unusually slow to hire as workers quit their jobs less often – a phenomenon known as “The Great Stay”.
Those conditions are expected to remain largely the same this year, according to economists, keeping young Americans from getting their foot in the door or getting back on their feet after layoffs. Studies show that early setbacks in a worker’s career lifetime earnings, mental health and career development.
“It was unbearable,” Tangalakis-Lippert said. “I no longer focus all my energy on trying to get a software engineering job. I applied for jobs at Best Buy, at every grocery store.”
“It feels really bad to go from making $100,000 a year to probably having to work minimum wage,” she added.
The US labor market remains generally on solid footing, with unemployment at a low 4.1% as employers continue to add jobs at a rapid pace.
But it has slowed steadily over the past two years, normalizing from the boom times of 2022 when there were a record 12.2 million openings. As a result, there was unusually slow growth in the labor market last year: the rate at which Americans were hired fell to 2013 levels — with white-collar industries and manufacturing pulling back the most — as the resignation rate hovered below pre-pandemic levels have .
That slowdown has had a big impact on younger workers.
Employment of workers ages 25 to 34 had the second-largest annual decline in December across all age groups, according to Labor Department data released Friday. Employment among those 20-24 was down slightly that month. Meanwhile, employment for the 35-44 and 45-54 cohorts rose during the same period.
Younger workers in certain industries may face a particularly difficult year.
“In those sedentary types of jobs, or white-collar jobs, it’s still going to be tough for those recent graduates or young unemployed people,” said Andrew Flowers, an economist at recruitment marketing firm Appcast. Flowers pointed to continued woes in the tech industry. “We already have full employment, and one of the implications of that is that the rate of hiring is slowing.”
Alexander Bloukos graduated from the London School of Economics in August with a master’s degree in international political economy, but could not find a job. He has submitted hundreds of applications over the past few months, yielding only a few dozen interviews, he told CNN.
The 23-year-old, who lives with his parents in Boston, said friends around his age faced the same challenges.
“I think we’re just getting crowded out by people with more experience,” Bloukos said. “It’s kind of depressing, but you just have to find a way to keep moving forward.”
Hiring of younger people could eventually increase if the Federal Reserve continues to cut interest rates. The central bank has already rolled out three interest rate cuts since September.
“Lower borrowing costs actually lead to improved affordability and more business activity,” said Julia Pollak, chief economist at ZipRecruiter. “The labor market is behind these kinds of improvements in economic conditions and business activity, but not by that much. If these improvements are sustained, you’re going to see hiring pick up in the next few months, and that will lead to more job turnover.”
The outlook varies by industry. Pollak said hiring in finance could increase this year due to expected deregulation and a more favorable environment for mergers and acquisitions.
However, Wall Street is not pricing in additional rate cuts until later in the year, based on inflation’s limited progress in recent months. The economy’s resilience in the face of increased borrowing costs also suggests that Fed officials are in no rush to cut interest rates further.
And even if hiring picks up, it may take some time to help young workers.
“Young workers, women, black workers, they’re often last in and first out, so it usually takes some time for their conditions to improve,” Pollak said. “Let’s say openings and net operating gains start to add up six months from now. It will take another three to six months after that before marginal groups start to see any meaningful gains.”