Why Teens Are Getting Shut Out of the Workforce

The number of jobs held by teens between 14 and 18 years old shrank by 33 percent between 2001 and 2014, according to a study released Thursday by CareerBuilder.

The report, which examined data for nearly 800 occupations, found the labor market shed 1.7 million teen jobs during that 13-year window. Staple positions for the age group – like coffee shop counter attendants and host or hostess positions – were not immune to the decline in young workers.

Jennifer Grasz, vice president of corporate communications at CareerBuilder, says teens in the aftermath of the Great Recession are facing more competition for jobs than they did at the dawn of the new millennium.

“There’s this new competitive dynamic that teens have to deal with today that they didn’t have to deal with before,” Grasz says. “Teenagers are now having to compete with college students and even retirees or other workers that are more seasoned for opportunities because people just need to earn a paycheck.”

A separate study released in January by JPMorgan Chase found there was a nearly 40 percent decline in the employment rate among 16- to 19-year-olds over the last 12 years. In 2011, the youth employment rate was reportedly 26 percent, the lowest such reading since World War II.

“The impacts of the economic recession – which left many employers reluctant to hire and, when they did, able to fill positions that historically had been filled by teenagers or young adults with more experienced or highly qualified applicants – continue to be felt,” the report said. “At the same time that young people are facing diminished opportunities to gain work experience, they are confronting a labor market that is increasingly demanding a more skilled workforce.”

The study pointed to a 2009 Pew Charitable Trusts report which noted that, for every year people work in their teens, their income rises 14 to 16 percent in their 20s.

“There’s some other research that suggests, especially for teens that aren’t bound for college, if they don’t work in high school, they have worse employment outcomes down the line,” says Martha Ross, a fellow at the Metropolitan Policy Program at the Brookings Institution. “It bodes ill for them down the line – that they’re missing an important on-ramp into the working world.”

Grasz says teens’ job woes are due in part to the growing number of people at least 55 years old who aren’t exiting the labor market at the same pace that they have historically.

“There’s a significant number of people who are not only postponing retirement but plan to work after retiring from their current job. They plan on taking part-time roles or maybe consulting positions beyond their current job,” Grasz says. “[The Great Recession] definitely did change the landscape for who [teens] were competing against for those entry-level roles.”

The CareerBuilder study found that the number of workers at least 55 years old increased by 40 percent between 2001 and 2014. Grasz says part of the glut has to do with baby boomers approaching retirement age, but she says there’s also a significant number of Americans who simply aren’t yet financially equipped to retire after the recession cleaned out their savings.

“I think when you look at things from an age perspective, people are staying in the workforce longer,” she says. “When you’re somebody that’s starting out in the workforce, how are you going to be able to gain that experience that’s needed down the road when you’re competing with people who already have a lot of experience and are taking up those jobs?”

It’s important to note, however, that teen employment figures also are dragged down by the fact that high school dropout rates have declined and college enrollment has increased, meaning fewer teenagers are able to work full-time jobs nowadays.

The percentage of high school dropouts among the country’s 16- to 24-year-olds most recently stood at 6.6 percent in 2012, according to the National Center for Education Statistics.

The center has compiled high school dropout data since 1960, and the percentage of dropouts in that young adult age group didn’t drop below double digits until 2003 (9.9 percent). So a larger percentage of kids are staying in school than was the case 50 or so years ago.

And the percentage of 18- to 24-year-old high school graduates (or those who earned their GED) who enrolled in a two- or four-year college within 12 months of graduation (or completion) was 66.2 percent in 2012. In 1960, the figure stood at only 45.1 percent.

“There has been an increase of school enrollment over time, and, in general, we know that those enrolled in school are less likely to be working,” Ross says. “There’s also been some discussion about how you don’t want teenagers working too much during the school year, because that can take away from their academics. But there does seem to be agreement that working, say, up to 15 hours a week during the school year is fine.”

More teens are in school in today’s society, whether that’s high school or college, so Ross says that’s naturally going to limit how many participate in the labor market, especially in full-time roles. The labor force participation rate for the 16- to 19-year-old age demographic was only 34.9 percent in February. The percentage of that age group who actually participated in the workforce peaked at 59.3 percent in August 1978.

Less than 1.4 million teens were employed full time in February, down from more than 4.1 million in June 1978, according to the Labor Department. And only 529,000 teens were unemployed and looking for full-time work in February, down from a historical peak of almost 1.2 million in August 1982.

And the age demographic at least 55 years old has increasingly spread into part-time positions since the Great Recession. There were 5.8 million such part-time workers employed in February 2008, according to the Labor Department. That number jumped 22 percent to more than 7 million in the span of seven years.

All of this has contributed to narrowing opportunities for teen employment, though Ross notes that declining labor force participation rates among teenagers are at least in part due to the fact that a smaller percentage is actually looking for work.

“I think among teenagers, there is an increased emphasis on unpaid internships, on extracurriculars and things like service learning,” Ross says, noting that teens, especially those bound for college, are using their free time to boost their resumes in areas other than work experience. “Another problem is that, among some lower-income communities and in neighborhoods where there’s high adult unemployment or lack of participation in the workforce, there’s just not a sense that the working world is for them, and they may not have the social network to help them get a job.”

Last year, about 1.3 million teens between 16 and 19 years old were hired during the peak summer employment months of May, June and July – down 4.3 percent from 2013 – according to a study from the Challenger, Gray & Christmas outplacement and transitioning firm.

“It is true that more and more teens are abandoning the labor pool for a variety of reasons, including increased volunteerism, summer school, sports and other activities,” John A. Challenger, the firm’s CEO, said in a statement accompanying the report. “However, for the millions who remain active job seekers, there is more competition for fewer opportunities.”

The Challenger study noted that more than five times as many teens were hired in March last year than were hired, on average, during the month of March over the previous 10 years. So as the job market continues to surge, it may be in teens’ best interest to start looking for summer employment early to have a better chance of locking down a position.

“The good news is that we’re now in a place in the recovery where those jobs are coming back,” Grasz says, noting the plentiful job additions the labor market has seen in recent months. “And so teens may, going forward, feel less competition for those roles that they would have felt at the height of the recession or immediately after the recession.”