Gen Zers may not need to be too quick to blame AI—or their lack of AI abilities—for his or her employment struggles. In line with new research, a normal scarcity of job openings is the first purpose.
Information from the Federal Reserve Financial institution of St. Louis analyzed labor circumstances for 18- to 24-year-olds between April 2023 and late 2025. The unemployment price for the group rose by 2.9 proportion factors attributable to general job shortage. By comparability, unemployment solely elevated by 1.1 proportion factors on account of employers shifting their calls for towards staff already expert in AI.
“Since April 2023, hiring has slowed, and younger staff, particularly new entrants, have borne the brunt of that softening,” authors William Rodgers III and Alice Kassens wrote of their analysis. “AI provides a further headwind on the level of labor market entry, notably for current faculty graduates, however its results stay smaller than these of the broader decline in job openings,” they continued.
Curiously, the authors additionally famous that when general labor demand was accounted for, “there was no comparable deterioration for staff ages 25 to 64.” In line with the researchers, that highlighted a significant matter of their work, which is that younger and inexperienced staff are often the primary to really feel the impacts of a slowdown in hiring.
To that finish, the research discovered that whereas an absence of jobs nonetheless impacted current graduates greater than rising AI demand, the hole narrowed. Fewer job openings and shifting AI demand solely drove up unemployment by about 2.2 factors and 1.7 factors, respectively. This information means that when corporations pull again on hiring, the youngest, possibly even hungriest, entry-level staff face the hardest market.
The brand new information aligns with earlier analysis on shrinking job alternatives for the youngest members of the workforce, a pattern now instantly impacting youngsters in search of summer time employment. In line with a May 2026 analysis of Bureau of Labor Statistics (BLS) information by Challenger, Grey & Christmas, teenagers are projected so as to add simply 790,000 jobs this summer time, down from 801,000 final 12 months. This decline is important, provided that final 12 months’s figures already marked the weakest summer time for teen employment within the 77 years the BLS has been recording this information.
With the chances stacked towards Gen Z, it’s no surprise so many are engaged on abilities they imagine could assist them land jobs or result in worthwhile facet hustles. In line with an Express Employment Professionals survey from earlier this 12 months, 66% of Gen Zers mentioned they educate themselves abilities on-line, in contrast with 50% of millennials, 35% of Gen Xers, and 20% of boomers. Whereas this self-training will not be a complete waste of time, it reveals that Gen Z is leaping via some severe hoops to set themselves aside. The problem is that such an enormous proportion of that technology is following the identical playbook.
The takeaway is obvious: Jobs for younger persons are usually the primary to go when hiring slows down. And whereas synthetic intelligence continues to be contributing to younger folks struggling to search out work, fewer general job openings imply a more durable marketplace for Gen Z than for anybody else.
