My teenage summer jobs were typical: lousy and formative. One summer, I scooped ice cream by a dock for $5 an hour plus tips. The next, I bagged groceries, with an August promotion to check-out and the privilege of moistening the leafy vegetables with a spray bottle. These jobs were monotonous and ill-paid but also instructive for my obnoxious, eye-rolling, teenage self. Codes need to be memorized. Uniforms need to be worn. Bosses need to be heeded. I learned those lessons, and I remember them today.
But fewer and fewer American teenagers are having such early working experiences. From the 1950s through the 1990s, between 45 and 60 percent of teenagers had summer jobs, with the numbers ebbing and flowing with the business cycle. Today, just one in four American teens has a summer job. Indeed, over the past decade, summer employment among people ages 16 to 19 has plummeted to the lowest level since the government started keeping tabs after World War II. Why? And what are today's teens doing instead?
One piece of good news is that they are not merely sitting at home or goofing off with their friends. According to a 2010 analysis by the Economic Policy Institute, the proportion of "idle" teens has actually fallen over the same time period. Nor does the recession explain the drop either. The youth unemployment rate has climbed precipitously, but young Americans started opting out of the labor market long before the economy soured in 2007.
The Wall Street Journal editorial board fingered one possible answer this weekend: recent hikes to the minimum wage."One of the first acts of the gone-but-not-forgotten Nancy Pelosi ascendancy was to raise the minimum wage in stages to $7.25 an hour in 2009 from $5.15 in 2007," the conservative-leaning board says. "Even liberals ought to understand that raising the cost of hiring the young and unskilled while employers are slashing payrolls is loopy economics."
But it is also loopy to think that the minimum wage hikes explain what is going on with America's teens. For one, businesses can pay workers under the age of 20 less than the minimum wage as long as they work for fewer than 90 days. More importantly, the phenomenon of teens electing not to join the labor force started long before the minimum-wage hikes, and previous minimum-wage hikes did not squeeze the young out of the labor market. Surely the minimum wage increase has some effect. But it is hardly a complete explanation.
So what is going on? There are two main answers. First, more teenagers are staying in school or choosing to do prep programs over the summer, at their own behest or by order of their helicopter parents. Second, young workers vying for menial jobs have faced increased competition from older workers and immigrants.
Indeed, a lot more teenagers are enrolling in summer school, and it goes a long way to explaining their dwindling participation in the workforce. In the summer of 1985, about 17 percent of teenagers attended some kind of summer school. Now, more than half do. On top of that, thousands more kids are taking other test-prep, advanced, and remedial classes. Community-service and internship programs have also become more popular, though there are no official statistics to show just how many kids are signing up for them.
The shift seems sociological as much as it is economic. "A number of factors suggest that teenagers are facing greater academic demands and pressures than in the past, which, together with the desire to achieve, may incline them toward placing greater emphasis on academics than on working," economist Teresa Morisi of the Bureau of Labor Statistics explains. Families are wealthier. College admissions are more competitive. Secondary education has become so expensive that few kids feel it is worth it to save up for it over the summer. Add it all up, and more kids study and fewer kids work during the hot summer months.
Second, teenagers have faced increased competition for those poorly paid summertime jobs in the retail, service, and construction sectors. There are more immigrants, both undocumented and documented, to compete against for low-paying gigs. A model done by the nonpartisan Center for Immigration Studies found that a 10 percentage-point increase "in the immigrant share of a state's work force from 1994 to 2007 reduced the labor force participation rate of U.S.-born teenagers by 7.9 percentage points." Studies by economists at the Federal Reserve and the Center for Labor Market Studies at Northeastern University have also found significant employment effects.
Teenagers face competition from their grandparents, too. In the late 1990s, the oldest baby boomers started to reach retirement age, but many remained in or rejoined the workforce, often accepting less-taxing, lower-paying, part-time positions—exactly the type of jobs once favored by teenagers. Just as the proportion of teens working has fallen, the proportion of workers older than 55 has climbed.
So while fewer kids are scooping ice cream and bagging groceries for the summer, more are spending their weeks off on schoolwork or unpaid labor. Youth employment might be down, but we hardly need to be wringing our hands about the laziness of the next generation. Still, there is one extremely worrisome trend in the data: the youth unemployment number—the proportion of kids who want jobs but cannot get them. The recession inflated the rate of youth unemployment to levels unseen since modern record-taking started in the 1940s. It currently stands at 24.2 percent, and more than 40 percent for black teens. A substantial body of economic literature shows that bouts of unemployment prove particularly corrosive for young workers, leading to reduced earnings and further joblessness down the road. So forget the kids who don't want to work. Worry about the kids who do.