The bottom line is that a weak labor market for youth isn't a recent phenomenon: the share of the earnings power among all newly hired workers going to 16-24 year-olds has fallen from 23.1 percent in 2015 to 21.0 percent today, with only 0.2 pp of that decline coming over the last year.

But of those able to get a job, how much does it pay? The NHQI wage index (which bases pay on occupational wages), shows that earnings power of newly hired 20-somethings has spiked over the last 12 months to its highest level on record, while it has fallen for teens.

The latest NHQI (www.upjohn.org/sites/defaul...) shows that hiring for teenagers is actually up 5.7 percent over last year, while for early 20-somethings, it's basically flat (and still near record lows).

A better summary measure of employment prospects is the employment rate (or employment-population ratio), which shows the fraction of people with jobs: 6/11

But not everyone is looking for work and gets counted in unemployment rates. Labor force participation rates show who is working or looking for work, and here the story changes. 3/11

The narrative seems to revolve around unemployment rates, which are readily available and long-reported out of habit. Indeed, these have narrowed between education groups and risen somewhat for young college grads. 2/11

Taking a longer view, over the past 25 years, real wage growth of new hires has lagged considerably at the very bottom, even as inequality has closed between the lower-middle and the top. 20/20

This recent narrowing since the pandemic can be seen below, with the strongest cumulative gains in inflation-adjusted wages of new hires around the 30th percentile, with lower growth in the top half. 19/20

This means that the stagnation in mean wage growth, now in its 4th year, has been driven by different parts of the distribution since 2022. 17/20

This stagnation over the past 3.5 years follows a blistering 23 percent inflation-adjusted increase between January 2015 and January 2022. 4/20

Actual, inflation-adjusted wage growth of newly hired workers surged at an annualized rate of 3.5 percent between July 2020 and July 2022, then declined slightly over the next two years before recovering slightly in the 12 months to date. 2/20

The reason for the different patterns? Changing labor force participation rates. Young college grads are about as likely to be in the labor force as they were at the end of the Greta Recession. All working age folks, not so much, as they have gotten much older on average.

If we look at the *unemployment rate*--the fraction of people without a job and looking for one relative to people either with jobs or unemployed--we get this picture:

*Employment rates* are the share of people with jobs. Here's the graph for young BAs (age 23-25) and all working-age adults:

Of course, the number of the foreign-born in the U.S. has also increased, so if we look at *hiring rates* (hires per capita), it turns out that that the likelihood of taking a new job is essentially at record lows for both groups, with an especially sharp decline for the foreign-born recently. 5/8

Hiring *volume* is another story: after jumping in 2024, hiring of foreign-born workers has dropped precipitously in the year to date, although hiring of native-born workers has also fallen, continuing a a nearly three-year trend. 4/8

If anything, there has been a slight uptick over the past few months, even as earnings power for newly-hired native-born workers has stayed flat. 3/8

But the earnings power of those jobs in the goods sector has been dropping sharply, much faster than in the services sector:

The hiring slowdown has been occurring most sharply in the service sector, down 2.7 percent just in the past seven months, even as hiring in the goods sector has ticked up slightly:

In January 2025 (www.upjohn.org/sites/defaul...), the earnings index slipped 0.1 percent over the month, continuing a slide begun in late 2023. It is down 0.6 percent over the year, but is still well above its prepandemic level.