Job Hopping Used to Be a Fast Track to Bigger Paychecks. For Gen Z, That Window Is Closing.
A few years ago, switching jobs every year or two felt like the smartest career move you could make. Megan Lieu, now 30, lived it. After graduating from the University of Virginia in 2019 with degrees in business analytics and finance, she started at EY Consulting. Two years later, she began hopping—staying as little as six months in some roles. Each move delivered roughly a 20% raise.
Today she tells younger friends and new grads not to follow her path. “It just doesn’t pay these days,” she says.
The post-COVID “Great Resignation,” when employees held the power and employers competed hard for talent, has given way to what many are calling the “Big Stay.” Quit rates have dropped sharply. In August, only 1.9% of nonfarm workers left their jobs, down from 3% in April 2022, according to the Bureau of Labor Statistics. Hiring has slowed, and employers have the upper hand again.
Why This Hits Younger Workers Hardest
Early-career job changes have long been one of the main ways people under 35 lock in real wage growth—the kind that outpaces inflation and sets the trajectory for lifetime earnings. Real wages tend to rise fastest before 35, then level off, and flatten almost completely after 45.
Gen Z and younger millennials are arriving at that critical window just as the payoff for switching has shrunk. In the 12 months ending in August, the median pay increase for job switchers was 4.4%—only about 1% above inflation. Compare that with the year ending March 2023, when switchers saw 7.7% gains (2.7% above the then-5% inflation rate).
The broader picture for young workers is tough. In the second quarter of 2026, unemployment for those aged 22–27 stood at 7.2%, versus 4.1% for the overall workforce. Even college graduates in that age group faced 5.7% unemployment, and 42% of young degree-holders were in jobs that didn’t require a diploma.
Glassdoor’s Employee Confidence Index hit a record low for junior employees in September: only 43% felt confident about their company’s outlook, compared with 63% of senior workers. Entry-level confidence fell four points over the past year while senior confidence rose.
Workers overall are also taking a smaller slice of the economic pie. In the second quarter of 2026, they received just 52.8% of nonfarm business output as compensation—the lowest share since the data series began in 1947. Over the 12 months through September, average hourly earnings rose only 3%, while consumer prices climbed 3.4%.
What’s Driving the Shift
Several forces are at work. Artificial intelligence is already reducing demand for certain entry-level roles. At the same time, the long shadow of the pandemic still lingers. During the recovery, service industries scrambled to restaff after lockdowns, and many workers reevaluated what they wanted from their jobs. That created a temporary frenzy of hiring and quitting.
Now the market has normalized. Employers no longer feel pressure to offer big premiums to poach talent. A 2024 survey by Marsh found that 67% of companies planned to pay new hires salaries comparable to what current employees earned—no more bidding wars. Another 9% said they never joined the premium game at all.
With openings scarce and many “ghost jobs” (listings employers don’t truly intend to fill) circulating, the cost of searching often outweighs the modest raise. Unemployed workers are also taking longer to land new roles: 44% of the unemployed in September had been out of work 15 weeks or longer.
What Younger Workers Can Do
Research shows that people who enter the labor market during weak periods can face lower earnings for a decade or more. This is not a full-blown recession, however, and history offers some hope. Many older millennials started careers during or right after the Great Recession, then later recovered ground by switching jobs during the Great Resignation.
Nela Richardson, chief economist at ADP Research, advises young workers to stack skills aggressively—through internships, apprenticeships, or whatever builds experience—and to follow where job growth is actually happening, even if that means shifting toward skilled trades. “In a labor market that is seeing new tools and new capital investments and the use of AI… knowledge and experience is coming with pay growth,” she says.
Megan Lieu has reframed the old job-hopping mindset into something she calls a “portfolio career.” Instead of collecting a string of 9-to-5 jobs, she encourages people to build complementary income streams—monetizing hobbies or side projects that can buffer an increasingly fragile full-time role.
Employers, she and Richardson both note, also have a stake in fixing the pipeline. “There’s no future of work without young people, full stop,” Richardson says. Companies that invest in apprenticeships, internships, and real development opportunities now will be better positioned when the market eventually tightens again.
The days of easy 20% raises from frequent moves appear to be over—at least for now. For Gen Z, the smarter play may be deliberate skill-building, strategic patience, and creating multiple income pathways rather than simply hopping for the next paycheck.