Gen Z is facing record challenges in today’s labour market, and other trends in jobs and skills this month

The headline figures paint a pretty bleak picture for the latest generation entering the labour market.

While overall joblessness remains low, youth unemployment is rising. In the US, the rate for young workers hit 10.8% in July, compared to 4.3% overall, according to US Bureau of Labor Statistics data. In parts of Asia and Africa, the figures are far higher – 17% in India, 16.5% in China and around 36% in Morocco, according to Morgan Stanley research featured in Bloomberg. In 2024, there were reportedly 1.2 million UK graduates competing for just under 17,000 entry-level positions.

The narrative that AI is eliminating jobs has become well established, but many economists argue the real story is more complex.

For those in the first fully online generation, the employment challenge extends beyond AI and automation. They are also facing a structural slowdown in hiring, stalled social mobility and deepening skills mismatches, all against a backdrop of economic uncertainty and rising geopolitical tension.

The contours of this crisis vary by region, but frustration among young workers is global.

Across Asia, youth unemployment rates are two to three times higher than headline averages, according to Morgan Stanley. In India, the Ministry of Skill Development and Entrepreneurship reports that just 2.3% of workers have formal skill training, compared to 75% in Germany and 96% in South Korea, leaving a generation caught between education systems and employer expectations.

In Africa, youth-led protests have swept Kenya, Madagascar and Morocco, fuelled by limited opportunities and rising living costs. With 70% of the continent under 30, the working-age population is projected to double by 2050, according to OECD data. The African Development Bank warns that Africa needs a new growth model to deliver quality jobs at scale to prevent unrest.

In Europe, the challenge is often job precarity rather than joblessness. Spain’s youth unemployment has fallen from 40% to 27%, yet contracts are shorter and wages are stagnant, Euronews reports. Similar ‘quick in, quick out’ employment patterns are happening across France and Germany, with young workers often cycling through temporary roles in hospitality, retail and tech.

In the United States, entry-level opportunities are narrowing, with economists citing trade-related uncertainty, the rise of artificial intelligence and a crackdown on immigration, reports Reuters.

According to the World Economic Forum’s Future of Jobs Report, 41% of organizations expect to reduce their workforce before 2030 due to automation, while 70% plan to hire people with new skills.

Yet AI is only part of the story. Leading economists attribute the slowdown in entry-level hiring to broader structural forces rather than mass technological displacement.

US Federal Reserve Chair Jerome Powell described the current phase as a “low-hiring, low-firing” economy, driven more by corporate caution in a cooling economy than automation. Economists from UBS and Goldman Sachs also attribute the US youth employment to a broader hiring freeze.

A recent Yale University Budget Lab study found “no discernible disruption” in the labour market since ChatGPT’s release in November 2022. Meanwhile, Gen Z workers are among the biggest adopters of AI in the workplace, with over half reporting using AI regularly to problem-solve at work (55%), according to Randstad.

While AI is undoubtedly reshaping work, slower hiring cycles and widening skills gaps may be the more immediate factors shaping youth employment.

The Future of Jobs Report 2025 projects a net 78 million new roles by 2030, even as 22% of current jobs undergo structural change. Most employers plan to upskill staff, with 85% offering retraining and 77% providing AI training, but 63% cite skills gaps as their main barrier.

Gen Z is adapting quickly. Despite entry-level openings down 29% year-on-year, many are diversifying income streams and using AI at work. Apprenticeships and vocational training are also resurgent. According to Forbes, 37% of Gen Z graduates are pursuing or already employed in blue-collar work, attracted by stability, pay and automation-resistant roles.

Employers are also shifting hiring practices. Skills-first approaches are gaining ground, with many companies dropping degree requirements and expanding skills-first opportunities. In emerging economies, initiatives such as the African Development Bank’s Jobs for Youth in Africa programme are supporting entrepreneurship, training and job creation at scale.

The Gen Z job crisis is real, but it is not inevitable. Despite widespread fear around automation, AI is more likely to amplify existing structural weaknesses, not create them. The solutions lie in boosting job creation, reforming education and training, and expanding access to pathways that reward skills, not just credentials.

If policymakers and employers can adapt at the same pace as this generation already is, the story of Gen Z and work may still become one of resilience.

“Job hugging” is emerging as a post–Great Resignation trend in the US, with 75% of workers planning to stay in their current roles through 2027, and 48% citing fear or economic uncertainty as their reason to stay.

Job postings in Singapore are rising, but competition is growing faster, with jobseekers up 11% versus a 3% increase in listings since last September. Shifting skill needs and slower global growth are reshaping the labour market as tech roles continue to expand, and hospitality and tourism jobs have surged 64% since June.

Only 11.7% of Australian jobseekers found long-term work through private employment services last year, as skills mismatches and shifting labour demand make it harder to connect workers with available roles.

US companies announced 153,000 job cuts in October, the highest for the month since 2003, as AI adoption, rising costs and weaker demand drive layoffs across tech and warehousing, reports Bloomberg.