Generation Z’s tough entry into the labour market

Generation Z has been particularly hard hit by the economic consequences of the pandemic, with unemployment reaching as high as 40%. Although the situation has improved compared to 2020, finding a decent job and achieving financial independence remains a near-impossible mission for a generation that aspires to make the digital leap.

The job market is a thorn in the side of Generation Z, the generation of young people born between the 20th and 21st centuries. Although there is no consensus on the exact start and end years, it is generally accepted that it includes those born between the mid-1990s and the end of the first decade of this century. They number more than 2 billion people worldwide and in a few years’ time will account for more than a quarter of the total workforce.

Preceded by the millennials and followed by the alphas, this is a generation that has already started to enter the labour market. And in many cases, they have done so at the worst possible time, when the world was suffering the economic consequences of COVID-19. 

Victims of the pandemic

The global pandemic hit Generation Z particularly hard, with unemployment in Spain reaching 40% in 2020, compared to 14% for the rest of the generations. That year, in almost all OECD countries, the unemployment rate of this demographic group was double or triple the levels of other older age groups. 

Generation Z is over-represented in sectors such as hospitality, tourism and leisure, which have been hard hit by pandemic-curbing measures, so job destruction was particularly hard on them.

Worse, their long periods of unemployment after leaving high school or university mean that they lose years of experience and training, which will reduce their chances of progressing further up the career ladder. One study indicates that these periods of unemployment can translate into a 2 % reduction in earnings over a working life.

Increased precariousness

Although the economic situation has improved since the hardest times of the pandemic, finding a decent job and achieving financial independence remains an almost impossible mission for members of Generation Z. In fact, in Catalonia, the rate of job insecurity is higher than in the rest of Europe. In fact, in Catalonia, the unemployment rate among 16-24 year-olds in the second quarter of this year was still above 25%, more than three times higher than that of the rest of the age groups. 

There are multiple factors behind this high level of unemployment among the youngest. One of the elements influencing their precariousness is temporary employment. The report “Young people and the labour market”, published in March, points out that young people have “significantly higher levels of temporary employment so that their access to employment is mainly through temporary contracts”. 

The first digital generation

Generation Z stands out for its flexibility and autonomy, as well as its mastery of digital tools. Hence their attractiveness for many companies that have yet to make the leap to digitalisation. They are also more risk-averse and financially aware than other generations, having experienced the 2007-2008 crisis as children. 

However, this is a generation that is not willing to accept a job at any price, as in many cases they value other aspects above the economic aspect. Unlike their parents, who aspired to a job for life, they are looking more for personal fulfilment. That is why in many cases they resort to self-employment to make their own projects a reality.

Significantly, according to the Randstad Workmonitor 2022 report, more than half of employees (56%) aged 18-24 would leave a job that prevented them from enjoying their lives. Many members of Generation Z would rather be unemployed than unhappy in a job they don’t like, according to the report.

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