The teen summer job outlook of 2015 is expected to be a slight improvement over the previous five summers, according to a new report from Drexel University’s Center for Labor Markets and Policy. It’s a disappointing forecast even as the national economy has seen a sharp rise in the pace of new job creation.
During the first four months of 2015, the seasonally adjusted average employment rate of U.S. teens was 28.8 percent—the highest since 2010. If this slightly improved teen employment rate continues, the number should increase to 29.8 percent for the summer months.
“The small gain in the share of teens who will work this summer is less than we might have hoped,” said Ishwar Khatiwada, an economist at Drexel’s Center for Labor Markets and Policy. “The nation has added an average of well over 200,000 jobs a month in the past year, but the summer job prospects for teens remain well below those we would expect in a near full employment environment.”
Entitled “The Summer Jobs Outlook for Teens in the U.S.,” the study looks at teen summer employment rates by gender, race-ethnicity, and age groups. It was conducted by Khatiwada, Neeta Fogg, PhD, a labor economist in the Center, and Paul Harrington, PhD, director of Drexel’s Center for Labor Markets and Policy and a professor in the School of Education.
Despite significant improvements in the U.S. labor market and the economy over the past few years, teenagers are still facing Depression Era-like labor market problems. In any given month in 2014, about 27 percent of teens were employed, down from 45 percent in 2000. This 18-percentage point drop in employment rate of teens over the 2000-2014 period was the largest among workers in other age groups.
Historically, teens across the United States have worked at higher rates during the summer as schools are closed. Fifteen years ago, nearly 52 percent of teens were employed in summer months of 1999-2000. Employment rates have deteriorated greatly since then for teens of all demographics, Drexel researchers have found.
“Working as a teen is more than just about earnings. The evidence is clear that there are important and lasting long-term gains in employment, earnings and even college enrollment and completion for kids who work,” said Khatiwada.
In the summer months of 2013-2014, the employment-population ratio of both male and female teens was about equal, at just over 30 percent, but the ratios varied more by race-ethnicity. White teens were employed at the highest rate (38 percent) followed by Hispanics (26.7 percent) while only 19-20 percent of Asian and Black teens were employed.
Teens from affluent families were also more likely to be employed last summer than those from low-income families. Drexel’s researchers found that teen employment rates rose fairly steadily with levels of family income. For example, only one in five teens from low-income families making less than $20,000 were employed. About 27.5 percent of teens in families with an annual income of $20,000-$39,000 held jobs, compared to 32 percent among teens in families with an annual income of $40,000-$59,000. About 41 percent of teens with an annual family income of $100,000-$149,000 held jobs during that time.
“To some, the relationship we found looks counterintuitive, but low-income teens don’t have the same resources or networks of relationships to find work as those from kids in middle and upper middle income families,” said Khatiwada.
Black teens from low-income families fared the worst in securing any type of paid summer employment. In the summer months of 2013-2014, only 13 out of 100 Black teens from families with annual incomes less than $20,000 were employed. Among Hispanic teens in this income group, the employment rate was only 18 percent.
To read the full report, download the PDF here.