An Integrated Approach to Young Adult Mental Health Rehab

How Generation Z Unemployment Affects Well-Being

Reading Time: 5 minutes

Getting your first “real job” after graduation, whether from college or high school, is a rite of passage. Even for young people who have been working since they were teens, transitioning from school to a full-time job marks an important milestone. Summer jobs, including internships, are key experiences as well, offering essential opportunities for skill-building and connection.

Ideally, young adults find a sense of meaning and purpose in the workplace, as well as a feeling of belonging within a social circle, no matter what career they’re pursuing or what industry they’ve chosen. On a practical level, bringing in a paycheck helps empower them to reach their next life goal, whether that’s moving out of their childhood home, buying a car, going to graduate school, or traveling.

However, the economic repercussions of 2020 are depriving this generation of their traditional sources of direction, motivation, and identity. Generation Z unemployment, which was already high before the pandemic, has become even more widespread, and young adult mental health is suffering as a result.

The Impact of the Pandemic on Gen Z Unemployment Rates

According to the US Bureau of Labor Statistics, the young adult unemployment rate as of January 2021 was around 9 percent, 1.5 times more than the national unemployment rate of 6.3 percent. And the rates were even higher among young Black, Hispanic, and Asian American people.

The high Gen Z unemployment rate is due in part to the fact that younger workers are more likely to staff the industries that were most affected by the pandemic: hospitality and leisure. While the businesses that are able to survive will slowly return, it’s unlikely that they will be able to hire at the same pace as they did pre-pandemic, particularly if occupancy in hotels and restaurants continues to be limited.

Even more concerning than the short-term prospects for young adults, however, are the long-term consequences. Economists say that Gen Z is likely to experience ongoing and severe impacts in the labor market for years, unless policymakers are able to change the tide.

Generation-Z will feel the long-term impact of this pandemic more than any other generation. Consisting of those born after 1996, with the oldest turning 23 years old this year, Gen-Z contains many recent high school and college graduates—young adults just starting careers. While Gen-Z is on track to become America’s most educated and most racially and ethnically diverse generation yet, the pandemic has already dealt a devastating blow to its economic engagement.

The Century Foundation

The Disadvantages of Remote Work For Young Adults

Those young adults who have been able to retain or find employment or internships in office settings are often working from home. And the remote workplace brings with it a new set of challenges for this age group.

Unlike many older people in the workforce, young adults are still in the process of developing their strengths and uncovering their passions. Often this happens through mentoring, exposure to multiple aspects of a business, or on-site projects that involve a wide range of details and tasks. Working remotely, for the most part, rules out these possibilities, particularly those that arise spontaneously during the workday.

Equally critical are the lost opportunities for forming the social bonds that sustain young adults. These connections tend to build over time during spontaneous conversations, face-to-face meetings, and collaborative projects. Simply spending time in a physical space, experts say—encountering one another in elevators, bathrooms, stairwells, or a break room—creates ongoing windows for creating social bonds. For young adults, “work proximity associates” (in the words of Ron Swanson of Parks and Recreation) often evolve into close and lasting friendships. Without proximity, it’s more difficult to build strong relationships.

How are unemployment and mental health related? A job you enjoy (maybe not every moment, but most of the time) provides many of the most crucial aspects of well-being, including:

  • Social connections
  • A sense of purpose and usefulness
  • Supportive daily structures and routines
  • The satisfaction of achieving small goals (and sometimes large ones)
  • The experience of learning and growing.

It’s no surprise, then, that unemployment has such a detrimental effect on mental health. The 2017 World Happiness Report (WHR) found that unemployed people report around 30 percent more negative emotions on a day-to-day basis. A 2021 WHR report found even greater disparities between employed and unemployed individuals during the pandemic, most likely because having a job helped alleviate isolation and loneliness.

Furthermore, a study published in January 2021 looked specifically at Gen Z unemployment and mental health, specifically its effect on well-being. The researchers found that among young adults (ages 18–26) who experienced job insecurity during 2020, indicators of poor mental health were significantly higher.

Know the Facts

In a study published in the Journal of Adolescent Health, anxiety and depression were two to six times higher among unemployed young adults vs. those with jobs.

How Young Adults Can Find Motivation and Purpose Outside the Workplace

As the country and the world emerge from the pandemic, job opportunities for young adults will hopefully become more plentiful. However, the current high rates of Gen Z unemployment and mental health challenges are reminders of how vital it is for young people to find self-worth and well-being outside of the school and the workplace. That’s not an easy task, because society teaches young people that achievement equals happiness—whether that’s achieving good grades or a promotion. But in fact, research shows that success doesn’t create happiness—rather, happiness creates success. Moreover, positive emotions lead to better outcomes in the workplace.

Thus, young adults who build habits that support well-being can overcome the challenges of Generation Z unemployment and establish a foundation for lifelong thriving. Here are a few ways young adults can cultivate the mental health benefits of working even when they don’t have a job.

  • Strengthen social bonds by scheduling get-togethers with friends and also with acquaintances who have the potential to become friends.
  • Reach out to past academic mentors or other individuals you respect to set up for a conversation about finding one’s passion and career path.
  • Take an online course—many are available at no charge—in a topic that interests you.
  • Volunteer at a local community center or nonprofit.
  • Create a daily routine that includes social time, exercise and other self-care activities, time outdoors, and focused time for pursuing work, academics, or a specific interest or talent.
  • Set small goals for each day that you can achieve and feel good about – sorting your closet, taking a walk, making a healthy meal, answering old emails.

In addition, if Gen Z unemployment is triggering or exacerbating symptoms of anxiety or depression, don’t hesitate to seek help. Newport Institute’s integrated treatment approach supports young adults to find self-worth, authentic connection, and a sense of purpose that comes from within.


J Adolesc Health. 2021 Jan; 68(1): 53–56.

World Happiness Report: Work and Well-being during COVID-19

 J Career Assess. 2018 Jan. 26(1).

Co-Occurring Disorders / May 13, 2021

Newport Institute

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