Trendspotting: Teen Employment Rises

NewsWire: 6/11/21

• The share of 16- to 19-year-olds who are employed is now the highest it’s been since 2008. With the normal supply of seasonal workers and older workers down sharply, the labor market has shifted in teens’ favor. (The New York Times)
• NH: Over the last few months, we have covered the difficulties small businesses have faced hiring new employees. Despite the economy reopening, both stimulus and Covid-19 are keeping many workers home. (See “Small Business Struggle to Fill Jobs” and “Non-College Educated Workers Lag in Employment.”) But one demographic is taking advantage of the labor shortage: teenagers.
• Teen employment is currently at its highest level in over a decade. The labor force participation rate for 16- to 19-year-olds was 37.4% in April and 36.8% in May. The last time it was this high was in September of 2009. 
• This rise in teen employment is a reversal of a 50-year trend. The share of teens in the labor force peaked in 1978 (57.8%) with first-wave Xers and stayed high through most of the 1980s. That was the golden (Xer) age of teen employment--the Reagan-era heyday of the "McJob."
• Starting in the early 1990s, the rate has been falling in a series of downdrafts, dropping just as first-wave Millennials were preparing to enter the teen job market. Much of the decline is due to teenagers using the summer months to continue their education and boost their resumes.  And parents wanting their kids to invest in the future rather than "grow up too fast" earning hourly cash. Why wrap tacos all day when you could be prepping for a credential that will boost your life chances of joining the meritocracy? (See "For Teens, More Summer School, Fewer Summer Jobs.")
• More recently, teen employment plummeted at the beginning of the pandemic. Their labor force participation rate dropped from 35.5% in March to 30.7% in April. (See “Teen Jobs Sink to All-Time Low.”)
• So why are so many Homelander teens now entering the workforce? It's basically because the future-building activities that would normally occupy their summer months are still in disarray or are outright canceled due to the pandemic. Instead of paying for an online summer course, working at the local pool may now really be a superior use of time. Not to mention many of these teens are benefiting from big wage boosts due to the labor shortage. Older workers may fear the risks of severe complications from Covid-19. Teens don't have that worry. Nor are they eligible for a benefits check if they don't work.
• Alas, this countertrend is unlikely to last beyond this summer. By next summer, I suspect many sports leagues, camps, and summer classes will be back to normal. Teens will want to play catchup on all the gold stars they missed. And, for older workers, access to "pandemic assistance" will be a distant memory.