The Job Market Has Changed... Again.

Over just the last 6 months, the job market has changed dramatically. Again, back in the good old days of 2024, all workers had to worry about was ghost jobs, quiet firing, job washing, career cushioning, invisible overtime, application black holes, resentism, digital downsizing, compensation compression, burnout attrition, and when all else fails, good old-fashioned rolling layoffs.

But today, the job market is dealing with a whole new set of trends. And don't worry, they come with a whole fresh list of dumb corporate buzzwords. New economic data, if we are allowed to believe that anymore, is revealing some stark realities about the ways that people are finding a job, keeping a job, and progressing in a job. Unfortunately, as you have probably already guessed, a lot of these changes are throwing young workers, and in particular, young men, out of the frying pan and into the fire.

For the first time ever, unemployment amongst young male college graduates is the same as non-graduates. The share of unemployed people entering the job market for the first time is the highest it has been since 1988 and job mobility has effectively frozen. Now, I know what you might be thinking. All things considered, the unemployment rate still looks pretty good, right? Well, that might actually be part of the problem. And if all of this wasn't bad enough already, there is now a good chance that art history majors are earning more than you are. So, ever since you found out about AI, you've learned that your computer science degree is actually a complete joke.

New college graduates are facing one of the most challenging markets for entry-level jobs in a decade. It's just like getting the first job. That's so hard. I've tried to apply for jobs for like a year now and just like most places like don't get back to me or they just like say no. I make fun of my college degree all the time cuz I'm not self-conscious. Realize it wasn't worth it. Even though society deems it as a great accomplishment. I'm about to call my school up and say that this degree that I spent four years trying to get four years was a waste of money.

There is a funny but not totally inaccurate anecdote amongst business analysts that if you want to find an industry that's about to have really bad job security then just look where all the Ivy League grads are going. For a while that was oil and gas companies before the 1980s oil crisis. Then it was outsourcing operations before the Asian financial crisis. Then early technology before the dot-com crash. Finance before the global financial crisis and now over the most recent decade it's been big tech paying huge salaries to talented graduates early in their careers. Now obviously there is a lot of hindsight here. Nothing can boom forever and of course a lot of young graduates from top schools are going to try to find a job that pays them as well as possible if for no other reason than to start paying back that tuition. The problem is that everybody else sees these growing industries where people can make good money earlier in their career and they try to get qualifications to move into those roles too. But no industry can boom forever. And by the time most people catch up, they find themselves overqualified for a role that doesn't exist anymore.

For the last 10 years, the story has been that everybody getting laid off from their factory job should just learn to code. But before that, it was everybody should go and get an MBA. According to the Graduate Management Admissions Council, 2022, right after the dot-com crash was the all-time peak of people enrolling in post-graduate business school in the hopes that it would boost their stalling careers. According to the numbers today, it looks like that well-intentioned but ultimately flawed advice may be going to college at all as the unemployment rate is now the same between graduates and non-graduates.

After this data went live, there were several articles concluding that this signifies the end of the higher education payoff, which is probably a bit of an oversimplification for the sake of hyperbole. This is absolutely a concerning trend, but there are two important details you need to understand about it before you go canceling that college admission. The first is that if both of these groups have the same rate of unemployment, that doesn't necessarily mean that the earnings advantage of college is gone. Looking for a job as a qualified engineer is normally going to be better than looking for a job as an unskilled laborer. So even though the same share of these two groups may be out of work, the earnings of the college graduates is still higher. Also something I feel I need to repeat as often as I can, the unemployment rate is a really narrow statistic that people pay far too much attention to as a singular data point. To count as unemployed, you need to be out of the job and actively looking for more work. Today, according to the Bureau of Labor Statistics, about 72% of people with a bachelor's degree or higher qualification are actively working or looking for a job. That number is falling every year, which we will address soon. But it's still significantly higher than the 56% of high school graduates who are actively engaged in the labor force, and it's even worse for people who didn't graduate high school. But they are getting more involved. And again, we will get to why soon. For now, what you need to remember is that even though this particular statistic looks bad, and don't get me wrong, it is bad, you are still more likely to have a job and have a higher paying job with a college degree.

But that's still not the whole calculation. Degrees are not free. And a lot of people are realizing that lifetime earnings are great and all, but sometimes a little bit of money early in life with no debt is better than more money later in life with big repayments the moment you are handed a piece of paper. The trend is that every year the math is looking a little bit worse. And that is something that should be carefully considered for any investment with a 40 or 50-year payoff period. But that's just the statistical details that you need to understand about this graduate unemployment problem.

The second and much more important point is that this only applies to men. The unemployment gap for graduate women is lower than it has been historically, but is still pretty wide. And it's actually been growing at the same time the gap for men has been disappearing. And the question is why? Well, this strange difference actually reveals a lot about other recent trends in the job market. So, it's time to learn how money works to find out how it's all changing.

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Another subtle but extremely important change that has been recorded in the job market is the changing payoff for job hopping. We've mentioned multiple times that workers who are overly loyal to their company statistically earn significantly less over their working careers when compared to those who hop jobs for promotions or pay bumps. But that has changed and over the last year the benefit has all but disappeared. Now a little bit of that is because wage growth is just slowing down overall. But a larger trend is that the job market is encouraging staying put and doing absolutely nothing. Nobody is hiring. Nobody is leaving their job. Nobody is pushing for a promotion. And nobody is doing anything that could open them up to the next round of layoffs. According to industry reports, some people are even avoiding new jobs that could be considered career advancements so they can stay with a company in a role where they are past probation and feel less at risk of being let go.

This is also benefiting people in less boom and bust careers like those who went and got an arts degree. Generally, these people go into their fields because they are genuinely passionate about it over people who are chasing a lucrative career. They generally take less career risks and hold on to roles that they become extremely proficient at, which makes them harder to replace than random business and commerce graduate number A3113. This is not the best strategy in good times if all you care about was making money. But it gave them a head start on what everybody is doing right now, which is holding on to their job for dear life. This trend of people holding on to the rules has its own buzzword because of course it has its own buzzword, and it's called job hugging. Overall, it's not a great sign when combined with the less than stellar new jobs data, but it is the logical response by all parties dealing with increased uncertainty, which is where we get back to this growing gap between young men and women in the workplace.

There is a lot to unpack there, but there are three key differences driving this trend. The first is the push to equalize gender balance in certain roles, but not all roles. The push has been toward getting women into male-dominated fields that require a college degree, like STEM and business management, but not as much the unskilled fields that are also dominated by men, like the trades and labor roles. Women in STEM has been a big focus of government programs, corporate initiatives, and school enrollments for decades at this point, and it's been highly successful at opening up the field to more talent. This means that men are competing with a wider base of competition than they would have in the past. And the simple fact is that there are only so many of these jobs to go around. But at the same time, the men in roles that don't require a college degree haven't had the same increase in competition.

This isn't a new trend. Before the pandemic shook up a lot of this data, male college grads had an unemployment rate of around 5% while their non-graduate peers had an unemployment rate of 6%. Female college graduates at the same time had an unemployment rate of around 3%. But their non-graduate peers also had 6% unemployment, so the gap was much wider. Now, it's important to point out that there have been similar programs to try to get men into historically women-dominated graduate fields too, especially nursing, aged care, and elementary school teaching. But overall, they have been less successful. Now, there are a few reasons for this. If we were being completely honest with one another, there is still a stigma around this. A woman landing a role as an engineer or office executive is seen as empowerment where a guy becoming a nurse is still the butt of the joke and an elementary school teacher is the target of suspicion and raised eyebrows. It absolutely should not be like this and it is getting better but it's silly to pretend it doesn't exist.

The second reason is that historically these roles have not paid as well and men have generally been attracted to more lucrative careers either because they need to support a family or simply because that's what they valued. The job market has changed faster than those cultural expectations, which is why men seek out more typically prestigious jobs. This current gap is a reflection of that reality. Safe, stable jobs like nursing are doing really well in a bad time thanks to an aging population while we are on the tail end of trendy jobs that would have made a lot of money in a better environment. This also explains why unemployment amongst non-college educated men has been pretty stable because construction, the trades, and other semi-skilled jobs have been pretty stable between increased home construction and infrastructure. You can also see the beating they took after construction slowdowns from the global financial crisis, which were not nearly as bad for their college-educated peers.

Now, these differences hurt women in the workforce, too. When women do go into these trendy fields like technology, they actually tend to do worse when it comes to downsizing. A study on the recent round of tech layoffs sweeping the industry found that women accounted for 44% of job losses while only representing 28% of the workforce. Now, the companies obviously didn't release comprehensive data on why they chose to lay off who. But generally, there are three explanations for this. The first is that these companies may have hired evenly, but they still segregated genders within different departments, hiring more women for jobs in HR, marketing, corporate culture, and internal development. These are coincidentally the first departments to get cut in downsizing. The second explanation is that in some ways cultural expectations work for men. They are seen as a breadwinner supporting a family where the #girlboss is more likely to land on their feet. This is another example of something that employers should clearly not be doing. But women are consistently judged more harshly in high-performing roles compared to men. Unfortunately, this often happens particularly from other women who disproportionately work in departments like HR, which can have a lot of sway over layoff decisions. The third crude explanation is that hiring practices that targeted a diversity objective over just hiring the best person for the job favored people who would underperform compared to their peers. So, when performance-based layoffs were conducted, these people were more likely to be below the cutoff. It's no secret that a lot of the cultural forward companies have built a hard 180 on a lot of these initiatives in the last year. Now, I am sure you can probably tell, but I am trying to be really careful about sidestepping the whole culture war rabbit hole here. But it's still important to acknowledge these realities when looking at these issues because even though it shouldn't, it will have a big impact on everybody's career.

One of the best things to do with this information is to use it to your advantage. Despite the stigma, one of the safest groups from trouble in the job market are men in previously female-dominated fields. Fields like healthcare already have a low unemployment rate, and men often find it particularly easy to get these roles because of the practical realities that they can more easily do a lot of the physical work these roles involve. This was dubbed the glass elevator effect all the way back in 1992 in a University of Texas article. It found that men often found it much easier to progress in these roles. And even though initial salaries were lower compared to male-dominated fields, after accounting for the higher chance of career progression, the lifetime earning shifted back into their favor. Now, obviously, don't pick a job because of some video on the internet. Healthcare and teaching are no joke, but also don't let some business school douchebag talk you out of it because chances are you will end up earning more than them. Genuine professions like this are also more reliant on performance compared to office politics. Go and watch this video next to find out how we forgot what professionalism even means in the modern workplace. And don't forget to like and subscribe to keep on learning how money works.