The American labor market has shifted dramatically. In 2022, job switchers saw their after-tax pay jump nearly 18%, compared with just 7% for those who stayed. This premium fell to 8% versus 5% by the first quarter of 2026, the smallest gap in seven years. The quits rate was only 1.9% in August, near its lowest level since 2020. Gen Z is hit hardest: unemployment for recent college graduates aged 22-27 reached 5.6%, compared with 4.2% for all workers. The average age of a worker starting a new job rose to 42 in 2025. Gen Z hiring has nonetheless increased, with more than one in four workers in this age group changing companies in the first quarter, but the associated pay raises have dropped 20 percentage points since early 2022.
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