The Teen Jobs Problem: It's Worse Than It Looks

Especially for low-income and nonwhite teens, summer jobs can be hard to come by.

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This summer, teens might be doing more lying around and less jobseeking than they once did.

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Because of a remarkably rough job market, millions of teens may not get the chance to wait tables, sit atop the lifeguard tower, or mow lawns this summer. Even more troubling, though, is the fact that a growing number of teens haven't either bothered looking for those jobs.

According to Labor Department data, the seasonally adjusted unemployment rate for teens 16 to 19 years old was 24.9 percent in April. That's down slightly from 27 percent in late 2010, but up substantially from the 12 to 14 percent seen in 2000. The remarkably high figure doesn't even fully illustrate the problem of teen joblessness, because the teen labor force has substantially shrunk.

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"Many teens have given up looking for a job," says Ishwar Khatiwada, economist at Northeastern University's Center for Labor Market Studies, who says that teens are seeing stiff competition for the jobs they want. "Older youth and older workers, those 65 and older, they're taking teens' jobs, and [teens] have to compete with immigrants, too."

The number of teens in the labor force—those who are either working or actively seeking work—is down by nearly 1.9 million from a decade ago and has, on a seasonally adjusted basis, remained relatively flat for roughly the last year and a half. As the unemployment rate is calculated as a percentage of people in the labor force, this suggests that far more than one-quarter of teens who want to work can't find a job.

For the broader population of all people 16 and older, the labor force participation rate is at 63.6 percent, a worrying figure, considering that in more robust times like the late 1990s, it has been above 67 percent. For people 16 to 19 years old, the rate has dropped to a much greater degree, from well over 50 percent through most of the 90s to 33.8 percent now.

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Those are seasonally adjusted figures, but according to the Center for Labor Market Studies, the dismal broader trend holds for teen employment during the summer. The employment rate for U.S. teens was over 50 percent for summer 2000, and around 42 percent in pre-crisis summer 2006. Since then, that figure has fallen off dramatically, hanging at around 30 percent during the last two summers.

The barren job market doesn't only mean less money for movie tickets and cell phone apps; a lack of work sets these teenagers up for a future of tough job searches.

"It impacts future earnings. The more you work today, the more you'll be working tomorrow," says Khatiwada. "Our findings show that if you work during high school or when you are a teen, you have a higher earnings potential in the future."

If teen jobs do improve income prospects down the road, a rough job market could help to further entrench the disparities that already exist for today's teens.

White teens from affluent families are employed far more often than teens from poorer and nonwhite families. According to Center for Labor Market Studies data, over 44 percent of white teens whose families made $100,000 to $150,000 annually were employed last summer, along with about 42 percent of white teens from families that made $75,000 to $100,000. Compare that to an employment rate of nearly 28 percent for black teens whose families made $75,000 to $100,000 and nearly 27 percent for white teens whose families made less than $20,000. Only 14 percent of black teens whose families made less than $40,000 had jobs last summer.

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Then again, Labor Department figures suggest that factors besides the recession affect different groups' high jobless rates. Historically, black teens tend to have a far higher jobless rate than their white peers. White teens' unemployment rate is around 60 percent higher than a decade ago, up from 14 to nearly 23 percent. Black teens, meanwhile, have a higher and more volatile rate, but one that is up only slightly from 10 years ago, from 34.5 percent then to 38.2 percent now.