Some people have been indoctrinated over the last decade that they are lucky to have a job. It might be hard for them to get their heads around the new circumstances.
A lot of people are scared to leave a familiar environment for the unknown.
A lot of people do underestimate themselves. Have you tried praising some specific skills and accomplishments for them. (Without mentioning any of your own, of course.)
And if you want to go out on a limb, search for jobs for them. Maybe something specific with a salary range better than what they are making right now would help. Headhunters do this all the time for money.
And as for your example, I saw something in the Times a while back about how resignations were contagious - when one person in a group does it, so do others. So that example seems to be common.
Well I think if the OP starts making comparisons about salary or lifestyle, it could make the conversation awkward.
I think with this topic, you have to find a balance between coaching a friend who appears to be struggling to achieve their full potential and sort of just butting into their life by projecting your values and goals onto them.
Also, if a person is unable to motivate themselves to find a job that is commensurate with their abilities and education, there might be some sort of issue there beyond simple “lack of confidence” that the OP might not be qualified to address.
I think the advice to find relevant job ads for your friends is spot on. Don’t overdo it, just send one link that shows how much he or she could make with their current skills. This solution has a ring of “I saw this and thought of you”, which is a nice kind of message to get, it takes away the difficult first step of looking at options, it might get them interested in browsing more job ads, but won’t make them feel put on the spot.
Try not to bring yourself into the conversation at all. Yes, changing jobs worked out for you, but everybody’s situation is unique and if your friend wants to talk about career, make it about them and their specific skills and options.
I would be more understanding about the people who have small children - for some parents, having kids makes them worry about money, but others just want to spend every minute with their family.
Just an update:
I spent the week doing some self-learning for an IT certification with one of my friends over zoom. He was doing better than I did most of the time and also showed interest in the material, as I expected he might. I am glad the stars aligned, timing wise so this was possible. He is a self-employed artist so that flexibility helped.
It’s just a matter (for both of us) of taking practice tests regularly and passing the certification exam. In theory, it shouldn’t be more than another 20 or 30 hours before we’re ready. I am sure he would then have the knowledge necessary to have more income security, even if it’s part time.
… so more income security would be welcome (speaking from experience).