Why over 400,000 Americans in their 20s are not working

Workers in their 20s are absent from the labor force—hundreds of thousands bloomberg reported March 17. It is difficult to determine the cause.

“Flourishing age” workers – 25 to 54 – returned to pre-pandemic and pre-crisis participation peaks in February. They now have a labor force participation rate of 83.1 percent.

However, two groups are less and less involved: people between the ages of 20 and 24 and those who are 55 and older.

It is easier to explain why the number of workers aged 55 and over is declining. Most Baby Boomers are currently in or past retirement age, and a smaller Generation X is replacing them. In addition, COVID-19 has hit this age group particularly hard.

Yet Gen Z is still 1.1 percentage points below their pre-COVID labor force participation rate, according to the Bureau of Labor Statistics. More than 400,000 Americans in their 20s and 20s are out of work—even among those in their 20s, there is a decline in participation and employment.

Some of this may be due to the pandemic. Hiring was interrupted, and those unemployed workers were fired early in their careers. This harsh preliminary labor market experience can scare people in their twenties, and COVID-19 protection measures may have been generous enough to keep them from doing so. Some may also have been recruited to care for younger and older family members.

However, the demand for labor is strong and the wages of young low-paid workers are rising.

“For those in their 20s, the oncoming flows seem to have led to a decline,” bloomberg wrote columnist Justin Fox. “Reversing them will likely require sustained strong demand for labor, which, given the volatile financial and economic environment at the moment, may be unforeseen.”