Find out why “NEETs” are disconnected from the job market and discouraged by their economic standing!
When the job market weakens, young adults are often the first to experience its effects. According to a recent report by the Federal Reserve Bank of St. Louis, approximately 16% of 18- to 24-year-olds are neither working nor enrolled in high school or college. These individuals, sometimes called “NEETs” (not in employment, education, or training), are often discouraged from participating in the labor force due to their economic situations.
According to the report, factors such as weak job networks, the need for a college degree, lack of transportation, or limited access to childcare also contribute to their decision to opt out of seeking employment.
For young adults aged 16 to 24, the unemployment rate reached 9.1% in July, which Alí Bustamante, a labor economist and director at the Roosevelt Institute, described as “typical.” Although, according to the U.S. Bureau of Labor Statistics, the youth unemployment rate dropped below 7% in 2023, reflecting a strong labor market at that time, Bustamante noted that a 9% unemployment rate is still considered normal during “relatively good economic times”.
“NEETs” Are Discouraged
Despite a generally improving job market, a significant number of young adults in the U.S. remain disengaged from both work and education. In 2023, about 11.2% of Americans aged 15 to 24 were classified as NEETs, according to the International Labour Organization. This means that about 1 in 10 of them are “being left out and left behind in many ways”, said Bustamante.
This trend particularly affects young men, as noted by Julia Pollak, a labor economist at ZipRecruiter. Pollak explains that the decline in traditionally male-dominated fields like construction and manufacturing, coupled with improvements in women’s education and employment outcomes, have contributed to the rising number of male NEETs. Furthermore, nearly 70% of disconnected young adults have only a high school diploma, according to the St. Louis Fed report.
Not Only “NEETs” Are Struggling
While some young adults are disengaged, others, despite being highly qualified, are struggling to find employment. A recent Korn Ferry report identified this group as the “new unemployables”. A combination of factors, including employers retaining their current employees and prioritizing internal talent mobility, has reduced job openings for even well-qualified candidates.
David Ellis, senior vice president for global talent acquisition at Korn Ferry, pointed out that this “talent hoarding” has made it difficult for new entrants to find jobs. Additionally, companies are hiring fewer new employees, especially for entry-level roles.
Pollak added that while the employment rate for teenagers is at its highest in over a decade, those in their early twenties face significant challenges in finding work. The labor force participation rate for 20- to 24-year-olds saw a “massive drop-off” during the pandemic and has struggled to recover, she noted.
According to a report by the National Association of Colleges and Employers (NACE), hiring projections for the class of 2024 are down 5.8% compared to the previous year. With more candidates competing for fewer jobs, periods of unemployment are becoming longer, with Korn Ferry’s report noting a 21% increase in the number of people unemployed for over six months.