Jun 9, 2023 - Economy

It's hot jobs summer for teens

Data: Gusto; Note: From payroll data of about 300,000 small and midsize businesses using Gusto's platform; Chart: Axios Visuals

Plenty of teenagers are nabbing summer jobs this year and the pay is way better than you'd think.

Why it matters: The surge of young folks into the workforce has been happening for the past few years and at first seemed like a pandemic blip —but turns out it's a trend with some legs.

  • Hourly workers are still very much in demand in the sectors where teens tend to work — retail, restaurants, or summer gigs at the pool or beach.
  • Some of those jobs used to go to older workers — think an older semi-retired guy working part time at the Home Depot. But those folks exited the labor market in the pandemic, boosting demand for younger workers.

The big picture: Employment rates for teens are expected to rise this summer from last year, according to a team of labor economists who put out an annual summer job forecast.

  • Wage growth among the youngest workers has been steeper than for other age groups. In April, wages for those aged 16-24 were up 11.5% from last year, compared to 6.6% for those 25-54, according to data from the Atlanta Fed.

Gusto, which handles payroll for about 300,000 small and midsize businesses, says the average hourly wages for teens (aged 15-19) on its platform hit $14.89 in May — up a whopping 41% since January 2020.

  • Teens are forecast to make up 18% of all hires this summer, per Gusto's report. It's the highest level in the four years they've been tracking the data. In June 2019, that share was 2%.

For example: As soon as school let out this year in Birmingham, Alabama, job applications from high schoolers started coming into Tortugas Homemade Pizza — and owner Matt Vizcaino was happy to hire them.

  • He hadn't seen many applicants over the spring. People "can be a little bit pickier in choosing a job than they used to be," he said. He's had to raise pay by about 15%. Starting pay for a teen without experience is $12 an hour.
  • Hiring mostly teenagers means that Vizcaino has to do a bit more management work than would be typical with older workers, but "I'm not gonna say no to having a decent staff again."

Zoom out: The share of teens with jobs had been steadily declining for decades before the pandemic — notching lower after the recessions in 2008 and 2001. The line is moving the other way now, as the chart below shows.

Data: Bureau of Labor Statistics; Chart: Axios Visuals

The extra-tight labor markets of the past few summers drove a surge of teens to work and is "really showing itself to be a much clearer long-term trend — of more teens working not only during the summer but during the school year," says Luke Pardue, chief economist at Gusto.

Yes, but: There is a dark side to the increased demand for teen workers, a worrying increase in companies relying on illegal child labor.

Worth noting: Pardue says that while strong demand is driving the surge, the teens he's talked with also really want to get out there and work — particularly after the isolation of the pandemic years.

  • "To be able to work with people again is really nice," says James, a 16-year-old living near Dallas who just started working at Chik-fil-A for $12 an hour. "A very good start," he tells Axios.
Go deeper