After graduating from the University of Virginia in 2019 with a bachelor’s in business analytics and finance, Megan Lieu took a job at EY Consulting. She spent two years there and then began job hopping, staying at one place for just six months. Yet each of her three moves, she proudly recalls, brought her a hefty income bump of around 20%.
Now 30 and self-employed since 2024, Lieu advises friends and new grads not to job hop as she did, because it just doesn’t pay these days. She left her first job in 2021, she explains, “during the initial boom of the post-COVID era when many people were getting new jobs and the power was very much in the employees hands rather than the employers.” But that post-Covid “Great Resignation” has given way to what is now being called the “Big Stay.” At a time when hiring is slow and employers seem to have the upper hand, workers are far less likely to job hop and those who do switch jobs are seeing more meager pay gains. Just 1.9% of nonfarm workers quit their jobs this past August, down from 3% in April of 2022, the Bureau of Labor Statistics reports.
That’s a particular problem for Generation Z and younger millennials since job hopping early in a career is one of the ways that new workers have achieved income gains, setting them on the path to higher lifetime earnings. Historically, workers see their fastest real wage growth (that is, increases above inflation) before they hit 35, with gains leveling off until 45 and real wages pretty much flat after that.
The current situation may feel particularly cruel to Gen Zers because of what they saw in the recent past. “If they have a sibling that is three or four years ahead and who entered the labor market in the Great Resignation, they’re having a completely different experience now than their older sister or brother did,’’ says Nela Richardson, chief economist for ADP Research, a branch of the big payroll company. “It’s a solid labor market, but it’s different for young people.”
How different? In the second quarter of 2026, the unemployment rate for all young workers, aged 22 to 27 was 7.2%, compared to 4.1% for all workers, according to the Federal Reserve Bank of New York. Even those young workers with college degrees had a 5.7% unemployment rate. Moreover, 42% of young college grads (compared to 34% of all those with college degrees) were working in jobs that didn’t necessarily require a diploma.
Entry level workers are so pessimistic that they’ve driven Glassdoor’s Employee Confidence Index to what the job site says is a record low. In September, just 43% of junior employees were confident about their company’s outlook, compared to 63% of those in the most senior ranks. That gap has been widening, with entry-level worker confidence declining four percentage points over the past year, even as the top folks became more confident about the economy and their own company’s fortunes. Glassdoor Chief Economist Daniel Zhao explained it this way: “Entry level workers continue to face a difficult job market with limited opportunities even for the workers who have been able to find a job.”
This comes as workers’ total share of the economy is shrinking–they received just 52.8% of nonfarm business output as pay in the second quarter of 2026, the lowest since the Bureau of Labor Statistics started tracking this data in 1947. In the 12 months through September 30, the BLS reported on Friday, average hourly earnings for all private nonfarm employees increased just 3%. Meanwhile, the consumer price index in the year ended in August (the latest reading available) rose 3.4%. That means that even as the economy kept growing, workers’ paychecks were losing ground.
The pressures on employee pay can be seen too in the narrowing return to switching jobs, as calculated by the Federal Reserve Bank of Atlanta. During the 12 months ended in August, the median pay of job switchers rose 4.4%, or 1% above inflation. In the year ended March 2023, as both the Great Resignation and the post-Covid inflation spike were cooling off, job switchers’ median pay grew 7.7%, a healthy 2.7% above the 5% inflation rate during that period. Those who stayed put during that same year saw their median salaries rise 5.7%, 0.7% more than inflation.
In fact, by the fall of 2024, employers had decided they’d had enough of bidding up salaries for job hoppers. When professional services firm Marsh surveyed employers back then about wage increase plans for 2025, 67% said they would be offering salaries to new hires that were comparable to those of current employees. Another 9% had never gotten in on the bidding frenzy, agreeing with the statement: “We didn’t give premiums to new hires over the past few years.”
And employers aren’t relenting. Job hopping, Richardson notes, typically rises during inflationary periods as workers use it as a way to stay ahead. But that hasn’t happened during this year’s Iran war-driven upturn in inflation because of the stagnant job market and employers’ determination to hold the salary line.
Is Artificial Intelligence or Covid to Blame?
Much has been written recently about how artificial intelligence appears to be shrinking jobs for young, entry level workers in certain AI-exposed industries. Richardson says an additional force hitting Gen Z is the long tail of Covid. As the economy recovered from the pandemic, she notes, employers in service industries and other sectors that had been hit hard by shutdowns and had laid off workers, were hungry to hire new ones. Meanwhile, more employees, after such a dramatic disruption to their lives, started asking, “Why am I in this job?” and “Can I work remotely?”
“So some of it was economic, but some of it was driven by behavior,” Richardson says of the record high quit rates and the competition for workers in 2021 and 2022. “Companies were all demanding workers at the same time. It was like a revolving door of luring workers from other companies just to fill their own head counts and replace exiting workers.”
Today, as the labor market has returned to a more normal state, employers have no need to offer premiums to lure job hoppers–or, for that matter, big raises to keep people from hopping. In this low-hire market, where ghost jobs (listed openings employers don’t really intend to fill) are on the rise and resumes are screened by AI, the hassle of job hunting isn’t necessarily worth the reward. “The premium is small across the board and the search cost for job switching is not nothing’’ says Richardson.
Also keeping workers in their place: With hiring so slow, those who do become unemployed, whether because they quit or were fired, are taking longer to find new jobs; as of September, 44% of the unemployed had been out of work for 15 weeks or more.
“When we look at Glassdoor reviews, workers are constantly talking about how they feel stuck in their current jobs and that means workers are getting more frustrated and more anxious,” says Zhao. “In a hotter job market, there would be a natural outlet for that frustration where workers would be able to hit the open market and find a better job whether that means better career opportunities, higher wages, or better work-life balance. But in the current job market where hiring is very sluggish, there’s no outlet for that frustration, so workers are just sitting tight.”
What Gen Z Can Do Now
Research shows that those entering the workforce during a recession face reduced earnings for 10 to 15 years into their career, and possibly other negative life effects too.
But the country isn’t in a recession, even if the market for entry level workers is weak, and it would be premature to write off Gen Z’s future at this point. Richardson points out that older millennials started their careers during and in the wake of the Great Recession. (While it officially lasted from December 2007 to June 2009, unemployment actually peaked at 10% in October of 2009.) Yet some of those same millennials, she notes, were able to make up lost economic ground by job hopping during The Great Resignation.
As an economist and mother to two young professionals, Richardson says her advice to Gen Z is to acquire as many skills as possible (even if that means taking internships and apprenticeships) and to follow job growth momentum, even if that means moving from white collar work into a skilled trade. “In a labor market that is seeing new tools and new capital investments and the use of AI and generative AI, knowledge and experience is coming with pay growth,” she says.
But she also suggests employers need to think hard about how they’re cutting off their own talent pipelines. “There’s no future of work without young people, full stop,” she says. “My advice to employers is to get all that young talent in your door through apprenticeships, internships, and experiences that increase knowledge and judgment because you’re going to need that in an AI-powered future.”
Megan Lieu job hopped—and got big raises—during the Great Resignation. Now she warns it no longer pays off and suggests young workers build extra streams of income outside their main jobs.
Crystal Keo
Lieu, the former proud job-hopper, explains she thought of her career jumping as a way to gain more experience and skills, as well as pay. She now talks about the concept differently with peers.
“I now am of the mindset that you can still have that job hopping mentality, but you should apply it to a portfolio career,” she says. “With a portfolio career, you’re not collecting 9-5 jobs. You are collecting other streams of income that might compliment your 9-5 because 9-5 jobs are so fragile now. So I would advise young people to move fast to try out hobbies and see whether they can monetize them to complement their existing [day] job.”
Leave a comment