Endangered rite of passage: Teen summer jobs
Chances are good you won't see as many teens working at the local fast-food restaurant this summer compared with a decade ago, even though America's unemployment rate is now at a 16-year low.
Teens are leaving the workforce in droves, hastening a three-decade trend. Even in the recovery years following the Great Recession, more teens are skipping out on paid labor, while many employers have to hunt for people to fill low-wage jobs.
What's going on with teens? Older Americans may be tempted to point to teenagers getting lazier, but it's the result of something else entirely: academic ambition. More teens between the ages of 16 to 19 years old are in school, which shrinks the teen labor force. Teens are also more likely to attend school during the summer. The Bureau of Labor Statistics found that they are four times as likely to be enrolled in summer school now than in 1985.
"They're thinking about their future from a broader perspective," said Christine Russell, a retirement and long-term investing expert at TD Ameritrade (AMTD). "They are going through that cost-benefit analysis and saying, 'I can earn this amount of money, which is a drop in bucket compared to the cost of college, or be focused on what I want to study in college and be a more valuable candidate at college" with a greater chance for earning scholarships.
The teen labor force participation rate reached a peak of almost 58 percent in 1979. By 2015, the most recent year of data provided by the BLS, that rate had declined to about 34 percent, which is lower than the Great Recession's 40 percent rate.
The drop has been even more drastic when it comes to summer jobs, the BLS said.
"Even though some teens still have summer jobs, the proportion of teens who participate in the labor force during the summer has dropped dramatically," the agency said in a report published earlier this year. "The summer break typically includes July. In July 2016, the teen labor force participation rate was 43.2 percent, down almost 30 percentage points from the high point of 71.8 percent in July 1978."
Yet a survey of teens by TD Ameritrade found that many may be working -- just not for money. About 56 percent of teens said they prefer an unpaid internship instead of a paid job. The survey also found that about half of teens are working outside of home each month, although some of those jobs could be babysitting or other "under the table" work that the BLS might not officially track.
Some teens may also want to work but are unable to find a summer job. Only about 4 out of 10 teens and young adults looking for summer work through 18 employment programs in 15 cities were able to find it, according to study from JPMorgan Chase (JPM).
In that case, it may be that the ranks of adults who are "underemployed," or workers who are working part-time but might want a full-time job, are taking some of the low-wage, unskilled roles that teens might otherwise have filled.
The downside for teens? It's more than a reduction in pocket money because their top saving goal is for their own education, TD Ameritrade found.
"They're putting that money away for something in the future," said Russell, "which is great delayed gratification for a teen."