Economy: Is Gen Z “struggling”?

Most every day we see news media or social media commentary that says Gen is “struggling” – often implying they have it the worst in history – and focusing on housing, or the job market, and suggesting a collapse of entry level jobs.

Those stories, though, are exaggerating for dramatic effect.

The labor market is not in crisis

• Overall job market: The U.S. labor market is still relatively strong by historical standards—nothing like the early 1980s, 2008–2010, or the worst of Covid.
• Young grads vs. everyone else: It’s normal for people in their early 20s to have higher unemployment than the overall population. What’s new: some segments of Gen Z—especially recent college grads aiming for white‑collar roles—are feeling a squeeze, even while the aggregate numbers look fine.
• The “catastrophic” narrative is exaggerated, but there are friction points.

Not a collapse, but a comedown

There are two overlapping truths:

1. Compared to history, today’s young college grads are not in a disaster.
   • For workers ages roughly 21–24 with a bachelor’s degree, unemployment and underemployment recovered from the pandemic shock much faster than after the Great Recession.
   • Their underemployment rate (working part‑time involuntarily or in jobs that don’t fully use their skills) has recovered more fully than it did after 2008–09.
   • Real wages for young college grads have grown modestly since 2020.
2. Compared to the very hot 2021–2022 market, things feel worse.
   • Job openings have cooled, especially in tech and some white‑collar sectors.
   • Some recent grads are sending out hundreds of applications, getting ghosted, or landing only lower‑pay or non‑degree jobs.
   • Media stories are often built around these painful anecdotes, which are real—but not representative of a generational collapse.

It’s not 2009, but it’s not the sugar high of 2021. It’s a normalization that feels like a crash if you graduated into the comedown.

The Gen Z label hides huge differences

“Gen Z” (age 13–28) is not one labor‑market story.

Roughly, you’ve got:

• Teens (13–18):
  • Many are in school; their “labor market” is part‑time work, summer jobs, and early work experience.
  • Teen employment has been relatively solid in recent years compared with the 2000s and 2010s.
• Young adults without a four‑year degree (late teens–20s):
  • This group has faced a long‑running erosion in job quality and wages, especially men without a bachelor’s degree. Labor force participation for young men with only high school or some college has trended down for decades.
  • That’s not a Gen Z‑specific shock; it’s a continuation of a 40‑year story of deindustrialization, automation, and weaker bargaining power for less‑credentialed workers.
• Young adults with a degree (roughly 22–27):
  • On average, they’re better off than non‑degree peers in employment and earnings.
  • But the premium of a degree feels less automatic, especially with high tuition and debt. That’s feeding the “college wasn’t worth it” narrative, even though the data show a substantial lifetime earnings advantage on average.

When headlines say “Gen Z is struggling,” they’re combining different stories into one dramatic story line.

Why does it feel bad for some Gen Zers?

A few structural and emotional factors are colliding:

• Expectations vs. reality:
  • Many Gen Zers were told that a degree—especially in certain fields—would guarantee a good job. Now they’re entering a market that’s good by historical standards but worse than the 2021 boom, and that gap between promise and reality stings.
• Cost of living and debt:
  • Even with decent employment rates, housing, and education costs are high relative to entry‑level wages. That makes “normal” early‑career struggles feel precarious. Housing is a problem since 2020 or so, the price of housing shot up at a much faster rate than the traditional rate of increase. This may have occurred due to the government blowing up the money supply by +42% – thus causing real assets (e.g. housing) to rise in price, when priced in devalued dollars. In 2026, some markets are now seeing a drop in prices and might revert to the longer term pattern.
• AI and entry‑level work:
  • There’s uncertainty about how AI will reshape entry‑level white‑collar roles. Some companies are automating tasks that used to be the “foot in the door,” which makes the path feel less clear.
• Social comparison and visibility:
  • Social media amplifies the extremes: the friend who landed a $150k tech job and the friend who can’t get a callback. That makes average outcomes feel like failure.

So the emotional climate is worse than the labor statistics suggest.

What’s “bad” right now—and what might reverse?

Concerning trends:

• For non‑degree young men especially:
  • Long‑term decline in labor force participation and wage stagnation.
• For some recent grads in specific sectors (tech, some media, some corporate roles):
  • Hiring freezes, and credential inflation for entry‑level jobs.
• Inequality within Gen Z:
  • Racial and gender wage gaps among young college grads.

Things that are likely cyclical or reversible:

• The current softness in white‑collar hiring:
  • Labor markets for young grads have swung before; the post‑Great Recession cohort had it much worse and still, over time, many recovered.
• The “worst time ever” narrative:
  • If the macroeconomy stays reasonably healthy or improves, the job market for new grads could look noticeably better in a year or two.

What’s the “real story” for Gen Z?

Gen Z is not facing a uniquely apocalyptic job market compared with earlier cohorts who graduated into 1982, 1991, 2009, or 2020. In many ways, today’s young college grads are doing better than those earlier groups did at the same stage.

• However, they are coming of age in a world where:
  • The floor for non‑degree workers may be eroding.
  • The cost of adulthood (housing, education, healthcare) is currently high.
  • The promise of college as a guaranteed “ticket” feels weaker.
  • Technological change (including AI) is reshaping early‑career paths in real time.

Gen Z is entering a labor market that is statistically decent but emotionally and structurally harder: higher stakes, higher costs, more uncertainty, and less trust that the old playbook will work.

There is also the issue of underemployment

Arts majors have very high underemployment:

• Performing arts: 63.9%
• Fine arts: 58.9%
• Leisure & hospitality majors: 58.1%
• Anthropology: >50%
• Computer science and computer engineering have low underemployment (below 20%).
  This suggests that even though some CS/CE grads are unemployed longer, once they get a job, it’s usually degree‑relevant and high‑paying
• Engineering (non‑CS) generally has lower unemployment and low underemployment.
• Biology and other natural sciences tend to have moderate unemployment and moderate underemployment, partly because many roles require graduate school.
• Accounting and finance: relatively low
• Marketing and general business: higher, but not near arts‑level rates

Most difficulty:

• Anthropology
• Fine arts
• Performing arts
• Leisure/hospitality majors
• Early childhood education (also high unemployment)

Least difficulty:

• Nursing and other health fields
• Education (except early childhood)
• Most engineering disciplines
• Accounting and finance
• Business