By Mari Hansen Arriving at the job market at the wrong time can be cruel in a certain way. It’s not dramatic; there aren’t any clear crashes, factory shutdowns, or standout incidents. Compared to that, it is quieter. For the fortieth time in a week, a recent graduate updates their LinkedIn profile. From a distance, the listings appear fine. Nearby, the majority call for two to five years of experience. for a position referred to as “entry-level.”
Gen Z inherited this labor market. Furthermore, the statistics behind it are much more dire than most hiring headlines suggest.
| Category | Detail |
|---|---|
| Generation | Gen Z — born approximately 1997–2012; oldest members now in their late 20s |
| Unemployment rate (2025) | Roughly double the national average; new workforce entrants hit 13.3% of total unemployed in July 2025 — a 37-year high |
| Industries shedding entry-level jobs | Finance and information services — losing an average of 9,000 jobs per month since 2023, versus gains of 44,000/month pre-pandemic |
| AI job displacement (Goldman Sachs) | AI erasing roughly 16,000 net jobs per month in the U.S.; substitution accounts for ~25,000 losses, augmentation adds back ~9,000 |
| Wage gap impact | A one standard-deviation increase in AI substitution exposure widens the entry-level-to-experienced wage gap by roughly 3.3 percentage points |
| Side hustle prevalence | 57% of Gen Z workers hold additional gig or freelance work, compared to just 21% of Baby Boomers |
| Home affordability | Median home prices now up to 8× young workers’ annual salaries; parents increasingly co-funding down payments |
| Labor market type | “Low-hire, low-fire” — stable for mid-career workers, effectively a closed door for new entrants |
| Financial behavior shift | “Financial nihilism” — rising Gen Z participation in crypto, prediction markets; long-term saving seen as increasingly futile |
| Key researcher | Economist Elsie Peng (Goldman Sachs) — authored the most granular framework separating AI substitution vs. augmentation effects on employment |
The percentage of Americans without jobs who were new to the workforce reached its highest level in 37 years in 2025, reaching 13.3% in July before falling to 10.6% by February. Even now, that number is greater than anything seen during the Great Recession.
Part of the reason this is so annoying to witness is that the overall unemployment rate appears healthy enough on paper. The economy is not imploding. Simply put, it’s not making itself available to those who most need it.
Many of the blame has been placed on Gen Z. By now, you’ve probably heard the story of people who are overly entitled, picky, and dependent on their phones. However, none of that is supported by the labor data. What it clearly demonstrates is structural.
Since 2023, the finance and information services sectors, which were formerly the main entry points for recent college graduates, have been losing about 9,000 jobs every month. These same industries were creating 44,000 jobs per month prior to the pandemic. That is not a change in the mindset of employees. A door is swinging shut.
Some economists refer to the type of market that has emerged as “low-hire, low-fire.” There aren’t any significant layoffs by employers. Simply put, they aren’t hiring new people. For employees who are already established—mid-career, seasoned, and settled—this stage feels steady, even cozy. It’s more akin to a wall for a 23-year-old with two internships and a business degree.
The role of AI, which is now a current threat rather than a potential one, makes this more difficult to unravel. According to research published earlier this year by Goldman Sachs economist Elsie Peng, AI is eliminating about 16,000 net jobs per month in the US economy. Of these, about 25,000 are lost to substitution, while 9,000 are added back through augmentation effects.
The professions that Gen Z workers are concentrated in—data entry, customer service, billing, and legal support—are the ones that are suffering the most. A typical first job used to be routine white-collar work. Young workers have virtually no protection against displacement if they lack specialized judgment or accumulated experience. A senior paralegal has knowledge that AI does not yet possess. A first-year student? That computation is different.
In all of this, it’s difficult to ignore what has been subtly happening to the college degree. The fact that doing everything correctly did not ensure a stable outcome, which labor economists first noted among Black graduates ten years ago, has since spread to the entire educated workforce.
Increasingly doubtful that a degree will fulfill its promises, parents who previously stretched their budgets to cover tuition are now putting that money toward down payments. Although it highlights an unsettling change in the implicit social contract surrounding education, it is a reasonable reaction to an irrational circumstance.
Gen Z is improvising in the meantime. Over half, or 57%, are engaged in gig work or side gigs, such as selling crafts, producing content, or accepting freelance contracts. The extent of the shift is evident when you compare that to 21% of Baby Boomers.
This is true entrepreneurship, true inventiveness. However, the data also contains a warning. It’s not a hustle culture when a significant portion of the workforce is juggling multiple part-time jobs. That market isn’t delivering what it should.
Some younger employees have begun placing riskier financial wagers that older generations would view as reckless, such as cryptocurrency, prediction markets, and speculative investments. Some of this may be the result of true financial acumen.
However, it’s also the kind of behavior that appears when traditional routes to wealth appear unattainable. Long-term prudence becomes less of a strategy and more of a fantasy when median home prices are eight times the yearly salary of a young worker.
Whether the current state of affairs leaves a lasting impression is the question that looms over all of this. Early career disruption has been shown to cause economic scarring, including decreased lifetime earnings and diminished wealth accumulation.
The trajectory has not yet been determined. Some of these avenues may still be reopened by housing policy, targeted hiring programs, and AI governance. However, that would necessitate treating this as a structural issue rather than a personality defect of a generation that was unlucky enough to graduate into a market that had already begun to retreat.
The entry-level position is still available. Where it is still present, however, it appears differently—it is more difficult to locate, takes longer to pay for, and is automated more quickly. That’s hard to understand for a generation that has done almost everything that has been asked of them. Furthermore, it’s becoming more and more unclear if the system actually has a solution for them.