‘NEET’: Why some young adults are disconnected from the labor market

When cracks start to appear in the job market, young adults are often the first to feel it.

By that time, about 16 percent of 18- to 24-year-olds are neither employed nor enrolled in high school or college, according to a recent report by the Federal Reserve Bank of St. Louis, which refers to many in this group. as “disconnected youth”.

Also often called “NEET”, which stands for “not in employment, education or training”, young people who want to look for work drop out of the workforce largely because they are discouraged by their economic situation. Weak job networks, college education requirements, lack of transportation or limited access to childcare can also play a role, St. Louis Fed.

Among 16- to 24-year-olds, the unemployment rate rose to 9.1 percent in July, which is “typical,” according to Alí Bustamante, labor economist and director of the Worker Power and Economic Security program at Roosevelt Institute, a liberal think tank based in New York City.

Although the youth unemployment rate fell below 7 percent in 2023, according to the U.S. Bureau of Labor Statistics, such lows were “emblematic of how hot the labor market was at the time,” Bustamante said.

“Nine percent is basically what we should expect in relatively good economic times for younger workers,” he added.

However, some young adults in the US are not working or learning new skills.

In 2023, about 11.2 percent of young adults ages 15 to 24 in the U.S. were considered NEET, according to the International Labor Organization.

In other words, about 1 in 10 young people “are left out and left behind in many ways,” Bustamante said.

Even though “this is usually the norm,” he said, “we should expect these rates to be lower.”

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Young men, in particular, are increasingly disengaged, according to Julia Pollak, a labor economist at ZipRecruiter.

“The NEET trend is largely a male phenomenon,” she said.

Pollak explained that this is in part due to declining opportunities in traditionally male occupations such as construction and manufacturing, while “women’s school enrollment, educational attainment, and employment outcomes have largely trended upward.”

Nearly 70 percent of disconnected young adults have no more than a high school diploma, St. Louis Fed.

Meanwhile, other young adults who are actively looking for work are well-qualified but often struggle to find jobs, comprising a contingent of the “new unemployed,” according to a recent Korn Ferry report.

According to the Korn Ferry report, a “perfect storm” has also created a flood of newly unemployed or highly skilled workers struggling to find employment opportunities.

“Employers are retaining the talent they have and increasingly focusing on talent mobility,” said David Ellis, senior vice president of global talent acquisition transformation at Korn Ferry.

This “talent hoarding” has resulted in fewer jobs available even for well-qualified candidates, he said.

At the same time, firms are cutting back on new hires, limiting entry-level opportunities as well.

While the teen employment rate is at its highest in more than a decade, 20-somethings are struggling to find work, Pollak explained.

“20- to 24-year-olds are the ones who saw a massive drop in labor force participation during the pandemic and have been lagging behind ever since,” Pollak said.

Overall, employment forecasts for the class of 2024 are down 5.8 percent from last year, according to a report from the National Association of Colleges and Employers, or NACE.

As more applicants compete for fewer jobs, unemployment also lengthens. Now, the number of people unemployed for more than six months is up 21%, Korn Ferry found.

Despite these labor market trends, “all is not lost,” Ellis said.

“Don’t wait to get in touch,” he advised. Reconnect with former employers or colleagues via LinkedIn or email and conduct informational interviews. After this initial approach, ask for any job opportunities or contacts.

In the meantime, make yourself more visible by writing about noteworthy industry topics and updating your resume to include keywords and so-called title tags, which highlight important items at the top.

Finally, don’t limit yourself to roles that include a promotion or raise, Ellis advised. Rather, follow a “career grid,” which might involve taking a lower position to acquire skills that will pay dividends later.