US Sees Spike in Youth Joblessness

The August jobs report showed the labor market is worsening for younger Americans. The youth unemployment rate jumped to 10.5% in August, the highest since late 2016 save for the pandemic period. The rate has risen by 150 basis points since the start of the year in a possible sign of things to come. Young workers with limited experience tend to take lower-wage jobs and difficulty finding that kind of employment may indicate more stress in the overall labor market.

Dan Shapero, Chief Operating Officer of LinkedIn, examines the key labor force trends playing out on the networking platform. Dan speaks with Tim Stenovec and Carol Massar on Bloomberg Businessweek Daily.

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.

Speaker 2 (00:07):
You're listening to Bloomberg Business Week with Carol Masser and
Tim Stenoveek on Bloomberg Radio.

Speaker 3 (00:14):
We know the labor report certainly top of mind today
and we want to kind of stay on it for
a little bit more because we did see job growth
moderate materially in recent months and openings have declined, weighing
on broader economic activity. Just a reminder in case you've
been under a rock today, nonfarm payrolls did increase twenty
two thousand in August.

Speaker 1 (00:33):
I mean the range that was a low. The range,
remember was zero to one hundred and forty four thousands.

Speaker 3 (00:37):
You highlighted that yesterday and.

Speaker 1 (00:39):
Nobody had negative, right, But now twenty two it's not good.

Speaker 3 (00:43):
No, And those revision showed employment shrank in June for
the first time since twenty twenty, that jobless rate taking
up to four point three percent. We got a good
voice on this.

Speaker 1 (00:50):
Tim dan Shapiro is COO of LinkedIn. He joins us
from Sunnyvale, California. Dan, you got great data on the
LinkedIn platform. Was this report as shocking to you as
I think it was to a lot of folks out there.

Speaker 2 (01:03):
Well. The labor market right now, it's slow but steady,
and I think that we've seen pockets of continued slow down,
but also pockets of strength. I think on a global basis,
healthcare is probably the area of greatest positivity around the world.
I think the conversation that a lot of people are
having right now is about what's happening with new college grads. Yeah,

(01:23):
true level roles. There has been some reports of slow
down in the amount of eventual level hiring that companies
are doing. And if you know someone that's graduating from
school right now, perhaps you're worried about them landing their
first role, and so it might take them a little
bit longer. It might be a bit more competitive than
we have seen in prior years. I think, on the
flip of that, one of the advantages that people coming

(01:44):
out of college right now have is that companies are
looking for people comfortable with AI tools, and oftentimes they
find that new college grads that haven't been in the
workplace yet, perhaps haven't developed all of their habits around
the working world. They might be more flexible to adopt
some of the new technologies that are so in demand,
and the skill sets so in demand by employers.

Speaker 1 (02:04):
So let's talk a little bit about this. Shout out
to Kevin Gordon out at Charles Schwaba saw him post
this a chart earlier in the day. This is the
unemployment rate for those who are between the ages of
sixteen and twenty four, So those young people who you mentioned, Dan,
that unemployment rate now at ten point five percent. That's

(02:24):
the highest it's been going back to April of twenty
twenty one. So, you know, in the recovery of the
COVID pandemic or the sort of the peak of the
COVID pandemic a few months after that, you talked about
AI obviously being something there that's affecting this, but I'm
wondering what that does for longer term career prospects if

(02:45):
people early in their careers just cannot get off the sidelines.

Speaker 2 (02:51):
Well, I think that for new college grads there's definitely
the process of landing your first job. But I think
the thing that employers are really really focused on right
now is they're trying to figure out how to retool
and upscale their workforces for an economy that is really
focused on AI. As a way that you went in
your market and they look at new college grads and

(03:12):
people earlier in their career, and they're thinking to themselves,
these might be the people that are more flexible, that
are more fluent with AI, that really can help us
go through the transformation that we know we're going to
have to go through as an organization. So my advice
to people that are earlier in their career is become
fluent in AI tools, showcase to employers that you know
these tools, that you can bring them into effect in

(03:33):
your new work. And I think we're going to find
that the people that build great careers are the people
that use this opportunity as a chance to really show
what they're capable of and help organizations go through transformation
that Yet, honestly, a lot of leaders are nervous about.

Speaker 1 (03:46):
What does it mean to be fluent in AI tools?
Because two years ago we were being told, hey, prompt engineer,
that's the hottest job around. Well, guess what, everybody knows
how to be a prompt engineer now, so those jobs
don't exist at all. What does it mean to be
fluent in AI?

Speaker 2 (04:03):
It's changing so quickly. In fact, you know, there's this
great stat we recently surveyed folks and realized that fifty
one percent of workers around the world they think of
keeping up on AI tools as like a completely other
job that they're doing on top of their day job.
And so what was you know, hit the new two
years ago is now becoming you know now what people

(04:23):
are focused on. I think the key thing about AI
fluency is that on a daily basis, you look at
the things that you're doing and you ask yourself, is
there something that I could be doing better by using AI? Now?
If I think about myself personally, you know that might
be writing the first draft of a presentation. It might
be that I'm trying to get up to speed on
new tariff legislation and so maybe I'm not as familiar

(04:46):
with that, and I want to use AI to help
educate me on how this might impact the markets that
I'm participating in. This is something that I definitely did
earlier in the year, as there was a lot in
the news about tariffs. So I think it's a mindset.
There is a mix of understanding what tools are out
there and they can do, but also just to have
a habit of bringing it into your daily work and
honestly showing your colleagues around you what's possible when you

(05:08):
find that nugget?

Speaker 3 (05:10):
And yet where is it that people need workers? Because
we talk so much Dan about folks who are building
power plants to meet the demands of AI, the energy
demands that there's not the engineers around. If you need
a contractor or a plumber or electrician, they're not around.

(05:30):
So I don't necessarily see the AI connection there. I
mean where else are there the disconnects? Maybe in our
labor force. And how is the pushback against immigrants impacting
the ability for people to maybe find workers that they
need for different types of jobs.

Speaker 2 (05:50):
Yeah. I spend a lot of my time talking to
heads of HR and talent at companies in the US
and abroad, and you know, even though hiring has slowed,
they consistently still say that one of the biggest challenges
that they have is finding great talent for whatever skills
they're looking for. Sometimes those are skills that might be
more out in the field, sometimes those are more corporate roles.

(06:14):
But there is still an insatiable need to find great folks.
And you know, one of the products that we announced
earlier this week is we believe that agentech technology it's
going to change how people do their jobs. But it's
also going to change how companies hire, and so we
launched a product called Hiring Assistant that is all about
helping recruiters find talent that they otherwise wouldn't have been

(06:34):
able to find and really allow organizations to find that
person that meets the needs of their skills. And in
some cases that's going to be a role where AI
skills are a core part, but in other cases it'll
be the kind of roles that you mentioned, where it's
more about building the power plants that facilitate this major
boom we're seeing in data centers.

Speaker 3 (06:52):
Hey, I almost a curious what you're seeing about compensation,
And we did get to read certainly that within the
monthly jobs report this morning, and we did see hourly
average hourly earnings come in. Let me just look here
a month of a month up three tents of a percent.
You're over year up three point seven tens of a percent.
Some concerns though about we're starting to see some softening

(07:13):
when it comes to wage gains. What can you tell
us about what you are seeing via the platform when
it comes to compensation.

Speaker 2 (07:21):
I don't have any unique data offer on compensation per
se I know that. You know, one of the things
that a lot of people are reporting on is that
hiring trends have slowed, but wages have maintained fairly stable.
So it'd be interesting to see if that persists. I
do think companies are looking at their P and L
and they're trying to figure out how to invest in

(07:43):
AI tools while continue to build the teams they need,
and so in some cases they're looking at the number
of the people that they're hiring, but they're also looking
at their compensation structures.

Speaker 3 (07:53):
All right, good to leave with that. Hey, listen, thank
you so much, Dan, have a great weekend. Dan Tapiro
is chief operating officer at LinkedIn, joining us from senny Vale, California,
on This Job's Friday m