Californians are concerned about economic challenges that could lead to shrinking opportunities for young adults, including the slowing job market and the advancement of artificial intelligence. While unemployment is high among California’s youth, rates of disconnection—dropping out of the labor force and not attending school—are improving overall. However, regional disparities stand out.
Amid stagnant job growth, unemployment rates in California have been climbing slowly but steadily since 2022. For young Californians, increases in unemployment have been larger than for others: up to 12.5% for those between 16 and 24 compared to 5.3% for those 16 to 65.
Rising unemployment captures some of the challenges experienced by young adults, but people also worry about disconnection. Close to half a million Californians ages 16 to 24 were out of work and school in 2025. While this is a vast improvement over the spike that occurred during the pandemic, disconnection from work and school hurts long-term prospects.
One bright spot: overall, the current generation of young Californians is less likely to be out of work and school than previous ones. Also, disconnection is a temporary phenomenon for most: about 5% remain out of work and school two years in a row.
But overall trends mask regional disparities that shape the experiences of young people across the state. Younger Californians in the Central Valley, the northern region, and the Inland Empire are much more likely to be out of work and school than those in the Central Coast, the Bay Area, or San Diego and Orange Counties.
Employment opportunities across regions explain some of these differences. Over the same period, unemployment was highest in the Central Valley and northern parts of the state (8.4% and 7.3%) and lowest in Orange County and the Central Coast (4.9% and 5.5%). However, unique factors for young adults in today’s job market may also be at play, such as slowing job growth in the Bay Area’s tech sector.
Other elements, such as socioeconomic status, high school performance, and expectations and access to higher education also play a role in disconnection and these vary dramatically across the state’s regions.
Macroeconomic factors driven largely by forces beyond California’s control will continue to impact the labor market for young adults in the near future. However, support for high school and college completion, along with opportunities to connect to careers through apprenticeships or paid internships, are critical for California to continue to see improvement in the share of disconnected youth and to reduce regional gaps.
Importantly, these efforts should aim to help more young people build skills for a changing economy. How young adults fare in these critical years shapes their long-term income, health, employment outcomes, and civic engagement—impacting individual trajectories and California’s economic prospects.
