Teen Summer Employment Outlook 2011

by Amanda Rohrer
March 2011

The job market today looks very different than it did a generation ago. Where a high school diploma was once the foundation needed to start a secure and lifelong career in manufacturing, construction, the trades, or an office job, today’s new workers require different qualifications for long-term success. A greater proportion of jobs now, than in the past, require postsecondary education, and this trend is projected to continue into the future.

Not only do higher-skilled jobs offer better wages and benefits but more job security as well. In general, the incidence and length of unemployment tends to be shorter for people with more education. This is even more striking for young people: as Table 1 shows, the unemployment rate for young people is much more dependent on level of education than it is for older working adults [1].

Given these changes in the economy, the rite of passage of a teen summer job has changed in purpose. Where once a summer job might have led to a permanent position after high school graduation, today it’s more about earning spending money, saving for college, or trying out different work areas to decide which direction to take. For youth who are uncertain about their futures, summer employment may be critical to the choices they make regarding education. When they find jobs they like (or don’t like), they may be inspired to pursue training opportunities they wouldn’t have otherwise pursued.

Unfortunately, although the economic recovery is picking up steam, youth summer jobs will still be hard to find in 2011 because of slack hiring and competition from older, more experienced workers.

Teens and Employment in Minnesota

The unemployment rate in Minnesota was 6.7 percent in January 2011, well below the national unemployment rate of 9 percent. While the January unemployment rate has fallen from the recessionary peak of 8.5 percent, the labor force participation rate has declined significantly, as well. Fewer people overall may be actively seeking work, but there are still plenty of experienced workers waiting in the wings, ready to re-enter the job market if there are jobs to be had.

While the labor force participation rate in Minnesota is typically high relative to other states, it is declining. The overall labor force participation rate has fallen 3.8 points from 75.5 percent in January 2001 to 71.7 percent in January 2011, about half of that from the worst months of the recession to today.[2] Among teens, the decline has been even greater; from an annual average of 69.6 percent in 2000 it has dropped more than 18 points.

Fewer and fewer teens are even attempting to find employment for reasons such as:

• Frustrated by the lack of job options
• Pursuing other opportunities
• Accepting more substantial support from parents

Unemployment among teens has risen in that same 10-year time span. Teen unemployment has been in the double digits since 2003 and passed 20 percent in 2009, remaining there during 2010. This suggests that at least some of the decline in the teen labor force participation rate is from frustration with the job market (see Table 2).

2011 Teen Employment Outlook

Teen employment regularly peaks over the summer months, reflecting school schedules. Third quarter employment data (July, August, and September) is dominated by this influx of young workers. From 2007, before the beginning of the recession, to 2009, the most recent year for which data are available, teen employment declined both overall and across all industries in which there is significant youth employment. Given the recession’s impact on unemployment and labor force participation rates, the decline is not surprising. 

As Table 3 shows, two industries — 1) accommodation and food service and 2) retail trade — hire the most teen summer workers. Teens are often well qualified for the jobs in these industries, because the jobs require few skills beyond customer service and, in some cases, because of the young customer base. Teens working in these industries make, on average, under $600 a month. However, teen earnings have been falling since 2007. From 2007 to 2009 teen earnings in accommodation and food service (down 7 percent) and retail trade (down 4.9 percent) declined more rapidly than teen wages overall (down 3.9 percent). This may primarily reflect a decline in the number of hours worked rather than the hourly wage, since the data source does not factor in hours.

Teens work in a number of other industries as well, often in seasonal or temporary jobs. Manufacturing is the only industry in which youth wages increased over the period. That accompanies, however, a decline of nearly half the number of teens employed in manufacturing. This suggests that only those who are particularly well-qualified or have experience in the occupation are retained by the employer (see Tables 3 and 4).

Relative to all workers, teens have fared worse in the recession (see Table 4). In the third quarter of 2009, teens age 14 to 18 made up 3.7 percent of the workforce. However, job losses for that age category accounted for 20.4 percent of the total employment decline from third quarter 2007 to third quarter 2009. While health care and social assistance industries and arts, entertainment, and recreation industries grew overall, there was a decline in youth employment. This indicates that new hires have been dominated by workers with more experience and suggests that teens may have more difficulty than usual getting jobs in those industries. Teens made up 83.1 percent of the job losses in accommodation and food services, but since that industry employs so many teens, individuals looking for employment in that industry may find that persistence can counteract sluggish hiring. While teens made up a smaller share of the job losses in manufacturing and in construction, those industries were hit hard early in the recession and have seen little recovery thus far – the few jobs that come back will likely be snapped up by experienced workers who have been unemployed for extended periods of time.

The health care and social assistance industry has seen the smallest loss of employment for teens and has grown the most overall. However, the pay gap between teen workers and all workers in this industry is substantial – where teen pay has hovered around $700 a month for the last few summers, wages for all workers in those same quarters has been steady at around $3,450 a month. This reflects the diversity of jobs available in the industry – teens may take support jobs as aides or technicians, or office jobs involving coding or billing, while there are also jobs as doctors, nurses, and administrators that require years of training and experience. In comparison, the retail industry has a few managers, but is dominated by sales occupations where the pay variation is minimal in most establishments.

Forecasts, too, project that health care and social assistance will remain a substantial employing industry in the coming year. Other industries that are predicted to grow aren’t necessarily going to be significant employers of teens, either because they’re not growing fast enough to replace substantial losses, or because teens make up such a small part of their workforce that minor increases are unlikely to extend to short-term unskilled labor (see Table 5).

A career, not just a job

Given the difficulties new entrants face just finding a job, it’s more and more critical that teens make the most of any opportunity available to them. While better paying jobs in industries like construction and manufacturing, which may help establish a career path, will be hard to find this summer, the more plentiful, if lower-paid, traditional teen jobs at malls and amusement parks can provide valuable experience in learning to:

• Work well under pressure
• Communicate well
• Remain calm in the face of chaos

These are all undeniably important skills for the future computer programmer, emergency medical technician, teacher, or almost any other occupation in the economy.

[1]American Community Survey, 2009.  Minnesota.  Minnesota Population Center.  Analysis of IPUMS microdata via IPUMS USA. 
[2] Minnesota Department of Employment and Economic Development, Labor Market Information Office, Local Area Unemployment Statistics (LAUS), Monthly 2007-2009.

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