Youth (Non)employment

As a followup to our class conversation on summer jobs on Friday, here’s a link to an item on “What happened to summer jobs?” on the Forbes Modeled Behavior site.

6 comments to Youth (Non)employment

  • Jier Qiu

    The article suggests that the increased minimum wage might contributed to the declining of summer jobs. According to an article posted by Pew Research Center (linked below), we also need to consider the fact that the number of entry-level jobs is decreasing. On top of that, more and more teenagers are pressured to take unpaid internships (not recorded by BLS as employed) as well as community services to polish their resumes. The Forbes article looks at teen employment by gender, the Pew article also investigates another important aspect: races. It turns out that white teens are most likely to be employed in the summer (at 34% in 2014) versus 25% for Hispanics, 23% for Asians, and 19.3% for blacks.

    http://www.pewresearch.org/fact-tank/2015/06/23/the-fading-of-the-teen-summer-job/

    • Are there that many students in internships? My hunch is the totals don’t sway the jobs figures much, there just aren’t that many younger people aiming for the sort of universities where that’s crucial.. Geography though matters: blacks are far more urban than the average American.

      As to minimum wage, we’d need detail on employment trends in industries highly dependent thereon. My sense is that a modest bump in wages doesn’t have a big effect, whereas more older Americans wanting a job may lead to a significant substitution component.

      In any event, a puzzle remains.

  • nurissog16

    There is some evidence that any disemployment effects on minimum wage workers would disproportionately affect teenagers. According to the Bureau of Labor Statistics 2014 report on the characteristics of minimum wage workers, around 9.4% of all workers age 16-24 who receive an hourly wage get paid at or below the minimum. That percentage drops to 2.5% for workers older than 25. Additionally, workers age 16-19 make up 21.4% of all hourly wage workers but are are also nearly 29% of minimum wage workers.

    Thus, if raising the minimum wage decreases employment (there are many who doubt the validity of that claim) it would appear to affect teenagers relatively more than other age cohorts.

    http://www.bls.gov/opub/reports/cps/characteristics-of-minimum-wage-workers-2014.pdf

    • Yes, if there’s a big effect, then it will affect teens. But only 29% are at the minimum?! – I would have thought the proportion much higher, since many teens are working their first job.

  • strauss

    I agree it would make sense that a higher minimum wage would disproportionately affect unemployment among teens, but it also seems that the minimum wage is low enough in the US that higher unemployment should not be a concern. A study by economists at UC-Berkeley showed that when accounting for heterogeneity in employment patterns and selectivity among stages there is not significant evidence that a higher minimum wage causes teen unemployment to rise. Teens are more likely to spend their summers in unpaid internships than previously, and industries such as agriculture and construction aren’t hiring as much as before. These industries also would not be strongly affected by a higher minimum wage.

  • Good to note the industry composition. At least one of my summer jobs was in a restaurant, my sense was that they could pay me the minimum but would have to pay more for a “real” worker who would continue when school was in session. Now fast food is more pervasive, and they can staff without resorting to students.

    Plus there’s a supply-side component, which I’ve not seen discussed except in the internship/volunteer component. Students are in general dependents, and with the low minimum wage, they may judge it’s too much work for the money as long as they can eat at the family dinner table [for those households where schedules let everyone eat together!] without paying out of their own pocket.

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