Teen Summer Employment Outlook for 2009

by Alessia Leibert - alessia.leibert@state.mn.us
May 2009

How many teens work?

Even though Minnesota’s share of youth who are working or actively seeking work is higher than the national share of 40.2, it has been steadily declining since 1995. According to 2008 estimates there were 131,000 employed and 21,000 unemployed teens in Minnesota. Together they represented 54.2 percent of the total 16- to 19-year-old-youth population in the state (see Table 1).

Some of the decline is the inevitable effect of the structural transformation of the U.S. economy from manufacturing-based to knowledge-based: more high school students delay entry into the workforce because they (and their parents) understand the importance of investing in higher education. Work participation among youth further worsens in times of economic downturn, because youth employment is very sensitive to labor market conditions. As shown in Figure 1, teen unemployment rates rose, and labor participation rates declined during or following the 1981-1983, 1991, 2001, and 2008 recessions, as teens who would otherwise be available for work returned to school instead.

Youth Summer Employment Program under the American Recovery and Reinvestment Act of 2009

In March 2009 Minnesota experienced the largest numeric job loss in post World War II history with the loss of 98,100 jobs over the year. Lack of employment opportunities can be particularly damaging for low-income youth whose families are most impacted by the recession. This summer these youth might miss an important chance to obtain work experience, develop work readiness and other soft skills desired by employers, and earn a wage that supports their own personal consumption. That is why the American Recovery and Reinvestment Act of 2009 (ARRA) provides funds to job programs designed to help young people gather work experience and build a resume. Unlike traditional job creation programs, the ARRA emphasizes work-readiness skill development in addition to earning wages. Research reveals [ 1] that soft skills are in high demand by employers not only in the service sector where effective interpersonal communication is essential but also in the goods-producing sector. Recruiters look at soft skills as a good predictor of how well a new hire will succeed in a career. Highly marketable soft skills are punctuality, dressing appropriately, getting along and working well with others, following instructions, accepting constructive criticism, showing initiative and adaptability, and assuming the responsibilities involved in maintaining a job.

These are all good reasons for youth to consider part-time or volunteer work or internships as an alternative to full-time paid work this summer. Any kind of experience in a field of personal interest can offer young adults the opportunity to develop positive work habits, attitudes and behaviors that will certainly be useful when the hiring demand is back to normal levels.

Where Do Teens Work? 

Although the hiring of teens in the summer is often directly related to the volume of hiring activity earlier in the year, dire labor-market conditions in the winter do not necessarily predict doom in the summer. There will always be seasonal jobs that fit well with teen lifestyles, and several industries will continue to rely heavily on youth labor during the summer months.

More than 93,700 teens age 14 to 18 worked in all sectors of Minnesota’s economy during second quarter 2008. Teen employment is typically concentrated in industries where work arrangements are flexible, skill requirements are low and the clientele is relatively young and trendy. In terms of sheer numbers, the food service sector absorbed by far the most teens, with more than 31,200 employed during second quarter 2008 (33.3 percent of total teen employment). This amounts to 18.4 percent of the entire food service workforce, specifically in limited-service eating places and full-service restaurants. In first quarter 2008 teens earned only $443 per month on average in food service, though tips are likely not fully reflected in these statistics. The industry as a whole averaged $1,170 per month during the same time period, reflecting in part that teens are likely to work fewer hours. Retail is the second most common industry for teens to find employment, with the highest concentrations in food and beverage stores (8,559), general merchandise stores (5,614), gas stations (3,380), and clothing and accessories stores (3,109). Youth in retail earned an average $452 per month during winter 2008, with the lowest pay in clothing and accessory stores and sporting goods, hobby, book, and music stores. Low wages in these industries might be compensated by store discounts and the “coolness factor” of being employed where young people like to hang out.

Large numbers (more than 7,400) of teens are also employed in health care and social assistance, with the highest concentration in nursing and residential care facilities. The industry paid average monthly wages of $600 in first quarter 2008 and attracts predominantly female teens. It is also one of the few industry sectors still experiencing job growth.

The 19- to 21-year-old age group earned considerably higher wages across all industry sectors, not only as a result of more work experience and higher education credentials, but also because full-time, year-round employment is more prevalent in this age group. A lot of manufacturing and construction jobs that younger teens cannot legally perform are taken by youth age 19 to 21.

Teen Employment Outlook for the 2009 Economy

According to the Current Employment Statistics program, employment in Minnesota has fallen for eight consecutive months from September 2008 to April 2009. The downward cycle that began with the credit crisis last fall seems likely to continue through the summer.

Of the industry sectors in which youth are most concentrated, manufacturing, and leisure and hospitality have been hardest hit with job losses, with full-service restaurants especially weak. This is bad news for teens this summer, because employment growth in leisure and hospitality is driven by some of the places that traditionally hire teens, including restaurants, amusement parks, hotels and resorts, golf courses, movie theaters, campgrounds, day and summer camps, theaters, and museums.

According to the short-term industry forecast (see Table 2), retail trade employment (including gas stations and food stores) is expected to decline by 1.8 percent in 2009. Within retail, only general-merchandise stores are likely to experience growth this year driven by relatively healthy consumer demand for Wal-Mart and SuperTarget stores, discount department stores and warehouse clubs such as Costco and Sam’s Club. The sector with the most positive near-term (as well as long-term) outlook is health care and social assistance with 2.7 percent growth expected in 2009.

ISEEK Web site - Help with Job Search! www.iseek.org is Minnesota’s official Web site for  career, education and job information.

What’s new on ISEEK? Sixty industry descriptions and more than 500 detailed occupation descriptions, with career videos and salary information: www.iseek.org/careers/clusters.html Tips for first-time job seekers: www.iseek.org/jobs/firstjob.html Minnesota-specific information about careers with the most openings, growing industries and careers, and high-pay careers with the most openings: www.iseek.org/careers/indemand.html A Skills Assessment tool that returns a list of occupations that are a good match for the skills a career explorer would like to perform in his or her daily work: www.iseek.org/careers/skillsAssessment An interactive Lifestyle Calculator, called the Reality Check Tool, that matches the price for the lifestyle users want with their career goals: www.iseek.org/careers/realitycheck.html A new education section to help prospective college students explore education options, prepare for college, pay for and apply to college. Young and adult learners looking for training can easily find Minnesota colleges, programs, courses, fields of study (majors) and K-12 online courses: www.iseek.org/education/educationSearch

[ 1]The 2007 Minnesota Skills Gap Survey was conducted by DEED to gain an understanding of the workforce needs of manufacturers in Minnesota. When asked about the skill areas in which employees will need more training, respondents in the manufacturing sector focused on several skills. Computer skills (49.7 percent) and basic employability skills (41.1 percent) were the only skills selected by more than 40 percent of respondents. Also, 78.2 percent of respondents indicated that a “work readiness” program for production workers would be somewhat useful, useful, or essential.