Monday, June 1, 2026 at 02:30 PM
Original source
NY Fed — Liberty Street Economics
MacroLab briefing generated by AI for informational purposes. Original reporting by NY Fed — Liberty Street Economics. Not financial advice.
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The Federal Reserve Bank of New York studied why more young people are struggling to find jobs since the pandemic ended, and found that remote work is a major reason. Researchers looked at data showing that youth unemployment rose sharply after 2020, while at the same time many companies switched to letting employees work from home. The Fed's analysis suggests these two things are connected: when managers and workers are spread across different locations instead of in an office together, companies find it harder to train and teach new, less experienced employees. As a result, employers have become reluctant to hire young people who need on-the-job training. The Fed estimates that remote work accounts for about 64 percent of the increase in youth joblessness.
If young people can't find jobs, it affects the whole economy in real ways. When people early in their careers can't work, they earn less money, which means they spend less in their communities. They may also delay big purchases like homes or cars, hurting those industries. Young people who go longer without work also fall behind in building skills and experience, which can hurt their earning potential for decades. Beyond individuals, companies lose access to fresh talent and energy that young workers bring. Over time, a workforce that skews older and more experienced, without enough new people entering, can slow economic growth and innovation. Finally, when more people are jobless, the government may spend more on benefits while collecting less in taxes.
Watch whether youth unemployment keeps rising or starts to fall back down. If remote work is truly the problem, you'd expect youth joblessness to stay elevated as long as remote work remains common. If companies gradually bring workers back to offices, or if they develop better ways to mentor remote workers, youth hiring should improve. Pay attention to news about whether major employers are ending remote work or requiring more in-office time. You can also track whether companies are creating new roles or apprenticeships specifically designed for training young workers remotely. Finally, watch for policy responses: if the government or companies try new programs to help young people get hired and trained in remote environments, that would suggest the economy is adapting to this challenge.