The summer of 2004 promises to be bleak for millions of this nation’s teenagers, many of who have already begun pounding the pavement in search of work — mostly to no avail given the weakness in the jobs market for this age bracket. Based on an analysis of teen employment rates during the first three months of this year and projections from summer teen employment models developed by Northeastern University economist Andrew Sum.
From Northeastern University
Bleak summer job forecast for nation’s teens, new report finds
The summer of 2004 promises to be bleak for millions of this nation’s teenagers, many of who have already begun pounding the pavement in search of work — mostly to no avail given the weakness in the jobs market for this age bracket. Based on an analysis of teen employment rates during the first three months of this year and projections from summer teen employment models developed by Northeastern University economist Andrew Sum, this summer will be another difficult one, about on par with last in terms of work opportunities and employment rates. Only 42 of every 100 teens, ages 16 to 19, can expect to find a job, far below the 52 percent that did so in the summer of 2000.
During each of the past few summers between eight and nine million young people, ages 16 to 19, were active in the labor force, including 2 million who search for work for a two-to-three month stint to earn extra money, boost their resume and garner experience during the out-of-school months. According to the new report by the Center for Labor Market Studies, the sheer number of jobs available for young people has declined considerably and continuously since early 2001.
Despite the recent job growth across the country, the supply pressures from the heavy influx of out-of-work older adults, recent foreign immigrants, new college graduates unable to find jobs in their chosen field, and even retirees needing to supplement their incomes, has further reduced employment opportunities for teenagers. Since the summer of 2000, when slightly more than half of all young people ages 16 to 19 managed to find work in a more robust job market, youth employment rates have steadily worsened. Last year’s summer teen employment rate (seasonally adjusted) was a dismal 36.5 percent, and this summer’s predicted rate isn’t much better. The Center estimates that only 37 percent of teens (seasonally adjusted) will find work, making the past two summers in particular the worst in nearly 60 years.1
Andrew Sum, the main author of the report, says that young people who lack high school diplomas, those living in low income families, those who are minorities, and those who live in low-income neighborhoods are at the greatest risk of not finding work. Youngsters who live in most large central cities, as well as those in economically depressed rural areas, will also face much more limited job prospects.
Some key findings from the report:
Between the summers of 2000 and 2003, the employment-to-population ratio of employed teens has declined by 8.5 percentage points, which means that 1.5 million fewer teens found work in 2003 than did in 2000.
Just over 36 of every 100 young people (seasonally adjusted) will find work this summer. This would tie last summer for the lowest teen employment rate since the end of WWII.
Employment of teens during the summer is highly correlated with both their race/ethnicity and household income, the study shows. Less than one third of young people with annual household incomes of $20,000 or less were able to find work last summer. That contrasts with more than 46 percent of those from households earning between $60 and 75,000 per year. Only 19 percent of African-American youth coming from households making less than $20,000 annually were employed compared to nearly 60 percent of white teens whose families earned between $60 and 75,000 per year.
Race a factor: African-American youth ages 16 to 19 were the least likely, of all the teen race/ethnic groups, to find employment, with just 23 percent of them working during the summer of 2003. Just over a third of Hispanic youngsters 16 to 19 found work, while 50 percent of white teenagers 16 to 19 were employed.
Among teens in each major race/ethnic group, those with the lowest household income were least likely to be employed last summer.
“The very low summer employment rates of teens is largely attributable to high rates of labor underutilization rather than to a lack of interest in work,” Sum said. “During the past summer, more than three million teens were either unemployed, underemployed, or members of the nation’s labor force reserve ? wanting a job but not actively looking for work due to perceptions that none was available.
“These idle labor resources hold down the real output of the economy, the earnings of young workers, their work experience, and their current purchasing power over goods and services,” he continued. “Effective summer jobs programs targeted toward youth with low employment prospects yield high net job creation effects at a reasonable cost, and well-designed and targeted programs can produce other desirable social outcomes, including less delinquency, improvements in high school students’ literacy and work skills, and higher levels of public services.”
Even with continued strong job growth over the next few months, teens will remain employed at rates considerably below those of the late 1980s and 1990s. The report calls upon on both President Bush and the U.S. Congress to provide emergency funding under the current Workforce Investment Act to state and local workforce development boards across the U.S. to provide several hundred thousand jobs for the nation’s jobless and disadvantaged youth.