Teen Workers Are Cashing In on a Hot Job Market, But Is There a Catch?
American teenagers are enjoying a boom in wages and benefits as employers scramble to fill open positions in a tight labor market. The pandemic-fueled labor shortage has shifted the power dynamic, with employers offering higher pay, more perks, and even tuition reimbursement to attract and retain young workers. This new reality is leaving some teens with more disposable income than ever before, but raises questions about whether this trend is sustainable and how it impacts their financial futures.
Key Takeaways:
- Teens are earning significantly more than they did just a few years ago. The average wage for newly hired workers aged 15-19 in June 2023 was $15.68 per hour, a 36% increase from the start of 2019.
- Employers are offering perks beyond pay. Companies are offering tuition reimbursement, mental health benefits, and matching programs for student loan payments to entice young talent.
- Teen employment is on the rise, with the highest participation rate since 2009. This suggests that teens are drawn to the improved job market and are actively seeking employment.
- Teens are less likely to be paid minimum wage than in the past. The share of 16- to 19-year-old workers earning the federal minimum wage or less has fallen below 3%, down from nearly 20% in 2013.
- While teens are benefiting from higher wages, the rising cost of higher education and inflation are creating challenges. Teens are saving more than ever before, but the pressure to pay for college and basic expenses remains high.
Employers Woo Teen Workers with Higher Wages and Perks
The tight labor market has forced employers to adapt their hiring strategies to attract and retain employees, particularly young workers. This has led to a significant increase in wages for teens, but also a shift in the types of benefits offered to them.
Chipotle Mexican Grill, for example, has long offered tuition reimbursement and has recently added a wellness program that includes free mental health counseling. These benefits are part of a strategy to attract Gen Z workers, a demographic known for valuing work-life balance and mental well-being.
Smaller businesses are also feeling the pressure to compete. Erin Powell, owner of The Sugar Shack in Minnesota, offers her teen employees free menu items during shifts, frequent raises, and a familial work environment. However, she acknowledges that the struggle to keep up with rising wages at larger chains can be a challenge.
The "Summer Job" Is Back, But Concerns Remain
With higher wages and enticing benefits, teens are returning to the workforce in droves. Data shows that teen employment is on the rise, reaching the highest participation rate since 2009. This suggests that teens are responding to the improved job market and finding opportunities that were previously unavailable.
The decline in teen workers earning the minimum wage underlines the shift in the job market. This trend is attributed to the increasing demand for labor, coupled with companies realizing that offering competitive wages for teens can be beneficial to attract and retain talent.
However, while teens are enjoying these newfound freedoms and financial benefits, challenges remain regarding the rising cost of higher education and inflation. Despite earning more, many teens are still finding it difficult to cover college expenses and basic necessities.
Striking a Balance Between Opportunity and Financial Reality
This period of prosperity for teen workers raises important questions about the future. For many teens, the extra money they are earning is going directly towards savings for college, books, and other necessary expenses.
Olivia Locarno, an 18-year-old college student, exemplifies this trend. She has stashed money earned from jobs at Chick-fil-A and Starbucks into a savings account to cover college costs. While she is grateful for the opportunity to work and save, she acknowledges the pressure to be responsible with her earnings.
Dailey Jogan, a swim coach with a high school team, is also saving money to cover future expenses, such as college and car payments. She credits her job with teaching her valuable soft skills that will be helpful in her future career.
Ultimately, this new reality for teen workers is a mixed bag. While they are enjoying greater wages and opportunities, the challenges of inflation and rising education costs continue to impact their financial futures. As the labor market continues to evolve, the question remains whether these gains will be sustainable, and how they will shape the next generation of workers.
