By many measures of teen employment this summer, the July jobs report shows the kids are alright.
Actually, better than that.
“Arguably, it is the best time ever to be a teen in search of summer work,” Julia Pollak, chief economist at ZipRecruiter, told MarketWatch.
As a whole, the economy piled on a larger-than-expected 528,000 jobs last month and the jobless rate fell to 3.5%, the lowest level since the late 1960s.
Drill into the numbers for workers ages 16 to 24 in the jobs report for July — when teenage employment traditionally revs up — and many of the numbers stay strong.
The economy had 20.9 million workers between the age of 16 and 24 last month. That’s up from 20.5 million in June, and it beats the July 2021 figures, when there were 20.2 million employed 16-24 year-olds. The last time that age demographic had more jobs was in July 2019, when the number was nearly 21.2 million.
The age segment had an 8.5% jobless rate during the month. That’s lower than the rates for last July and August, and much lower than the unemployment rate in summer 2020. August 2019 had a lower rate, at 8.3%.
It’s worth making a distinction between the job seekers in the 16- to 19-year old category and the 20- to 24-year-olds, said Paul Harrington, a Drexel University professor who has studied the teen and young adult labor market. The employment rate of workers within the 16-19-year-old segment declined from June to July, and it’s contracted year-over-year. At the same time, jobless rates in the same July 2021 to July 2022 timeframe increased, he noted.
Teen employment numbers increased to 5.4 million from 5.26 million a year ago, but that’s an outgrowth of a larger teenage population, he said.
It’s a much different scene for the 20- to 24-year olds, he said, where the data all points to robust gains. One example: their jobless rate was 9% a year ago, but it’s 6.4% now, he noted.
In a tight labor market that’s hungry for staff — especially at businesses trying to meet the summer bustle — it’s understandable that younger workers are going to make out well.
Here’s why Pollak thinks the conditions are great for teens to snag a job now.
Teens are getting hired for better-quality jobs
It starts with a good chance of getting a good job, she said. “In an extremely tight labor market, employers are struggling to fill vacancies and are increasingly prepared to take risks on younger workers even if they lack the right credentials and have little training or experience.”
Pollak recalled a high-up talent management professional at a major company telling her, “We are really scraping the bottom of the barrel now, hiring the kinds of candidates we would never before have considered.”
Younger workers shouldn’t take that as a slight, they should view it as an opportunity.
“Staffing shortages give ambitious younger workers the chance to wear many hats and try out different roles,” she noted. “They also give the best employees — those who prove to be reliable and hard-working, and who have strong people skills — the chance to rise up the ranks very quickly.”
Wage growth is stronger-than-average for teens
Another reason it’s a good time for teens: there’s been strong wage growth in many of the lower-paying jobs that younger workers tend to take, and employers are offering more perks and fringe benefits, Pollak noted.
Average hourly earnings for workers overall increased to $32.27 in July, a 5.2% year-over-year increase. That’s still not beating four-decade high inflation rates, recently seen in the 9.1% year-over-year increase for the cost of living in June.
But some data indicates young workers are an exception to the rule. The hourly wages of 16-24 year olds grew an average 12.5% in June, according to data from the Federal Reserve Bank of Atlanta. Overall, wage growth as a 12-month moving average increased 5.3% for all workers, said the data (which is not inflation adjusted.)
Younger workers getting their start when employers are willing to pay more may reap the rewards over their career, said Andrew Challenger, vice president of the outplacement firm Challenger, Gray & Christmas.
“If they are entering into the workforce at a time when the labor market is booming, it might give them one little notch up” for pay that keeps compounding for future salaries and salary expectations, he said.
“Those early head starts play out over people’s entire lives,” Challenger said.