Vanishing Act: Watching the Teen Summer Job Market Disappear

Andrew Sum and Ishwar Khatiwada
July 13, 2011

Traditionally, a summer job is many
teenagers’ first experience in the job market. Yet the past decade has witnessed
a significant deterioration in the summer job market for adolescents ages 16-19.
Despite the persistence of low teen summer employment, and a history of
bipartisan support for programs promoting youth summer employment, the issue
has yet to receive adequate attention from policymakers.

During the summer of 2000, near the height of
the early 1990s-2000 national economic boom, nearly 52 percent of the nation’s
teens held some type of job (Chart 1). As a result of the national economic
recession of 2001 and the largely jobless recovery of 2002-2003, the teen
summer employment rate dropped considerably, falling to 41 percent by 2004.

Over the next two years, the teen summer
employment rate held steady despite fairly strong gains in overall payroll
employment across the nation that normally would have led to an increase in
teen jobs.

The next four summers, from 2007-2010, saw the
teen employment rate fall steadily and sharply from 42.6 percent in 2006 to
29.6 percent in 2010. Over that span, the summers of 2007, 2008, 2009, and 2010
each set post-WWII summer lows for teens.

No other age group of American working-age
adults has been beset by such a dramatic decline in their overall employment
rates over the past four years, or over the last decade as a whole.

There are no signs that teen employment rates
will improve this summer, either. Under a summer employment rate projections
model we developed, only 29 percent of teens will be employed during the summer
months of June, July, and August. An employment rate this low will represent a
near tie with last year’s lowest ever summer employment rate for teens since World
War II.

Chart 1:

Trends in the Summer Employment / Population Ratios of
the Nation’s Teens 1989 – 2010

(Not Seasonally Adjusted)

As steep as the drop in teen employment has
been, it hasn’t fallen on all teens equally. Teen employment rates in the U.S.
during the summer months (and on a year-round basis) vary widely across family
income groups and race-ethnic groups, with low-income black and Hispanic youth
experiencing the lowest employment rates.  

During the past summer, the share of the
nation’s teens with jobs varied from under 22 percent for teens with family
incomes under $20,000, to 26 percent for teens with family incomes between $20-40,000,
to 37- 38 percent for teens with family incomes over $75,000.

Accounting for race shows even greater
disparities in summer teen employment rates. The breakdown by race and
ethnicity of teens at work in the summer of 2010 shows about one in ten low-income,
black youth and between one in seven and one in five black and Hispanic teens
from low- and middle-income families.

Yet employment rates over the same span were
40 to 41 percent for white youth in families with incomes in the middle and
upper middle income range. This means more affluent white youth were four times
as likely to be employed as low-income black youth.

Chart 2:

Employment Rates of Teens (16-19) in Selected Household
Income/Race-Ethnic Groups

in the U.S. during the Summer of 2010

What the data show is that the youth who need
work experience the most are getting it the least. This includes young teens ages
16-17, males, blacks, and low-income youth who have been hit the hardest by
declining teen employment rates.

In the past, low-income black youth – those
who have seen the greatest drop in employment – were the major beneficiaries of
federally-funded summer youth employment programs. Over the past decade funding
for these programs has been discontinued by the U.S. Congress with one
exception—the 2009 American Recovery and Reinvestment Act.

Not only has the steep drop in the summer
teen employment rate over the past decade drastically reduced the number of
teens who obtain any exposure to the world of work during the summer months, but
it has also considerably narrowed the range of jobs by industry and occupation
in which they are employed.

This ongoing national disaster for teen
employment has not received any substantive attention from the nation’s
economic policymakers in either political party. Only governors, mayors, and
town officials are doing anything to help put our nation’s teens back to work.

Investing in summer work experience for teens
is an important way to strengthen our nation’s current and future workforce. Combined
with opportunities for learning both on and off the job, expanded summer jobs
could contribute to an increase in the human capital skills of the nation’s
youth with favorable payoffs in both the short and long run.

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Andrew Sum is the director at the Center for Labor Market
Studies at Northeastern University in Boston, Massachusetts. Ishwar Khatiwada is a senior research associate at the
Center for Labor Market Studies at Northeastern University in Boston,

This article was originally published on Spotlight on Poverty and Opportunity. It is reprinted here with permission.