School's out for summer, and that's good news for businesses--especially for the leisure and hospitality sectors that have been hit hard by the labor shortage. For companies struggling to secure the staff needed to keep up with seasonal demand, there's never been a better time to hire a teenager.
Last summer, the teen labor force participation rate was at its highest point in 13 years. This season, even more young people will be looking for work. A third of teenagers will be employed from June to August this year, the highest percentage since the summer of 2007, according a new report from the Drexel University Center for Labor Markets and Policy.
In 1978, half of American teenagers held down a job. In the decades since, fewer have joined the workforce with the number falling steadily since 2000. By 2010, in the aftermath of the financial crisis, prospects for a summer job bottomed out with only a quarter of 16- to 19-year-olds collecting a paycheck.
With the largest teenage workforce available in 15 years, businesses plagued by constant openings may finally be able to fill out payroll. Still, do not expect that job candidate to come cheap. Teenagers hold an unusual position of leverage in this labor market. With teenage unemployment at its lowest level since the 1950s, young people with limited résumés have not struggled to find a job or receive multiple offers.
Employers need to be prepared to offer a better hourly wage than when they were in high school. Since the beginning of 2021, hourly wages for 16- to 24-year-olds have been growing more than twice as fast as the wages for all other age groups. With those gains hovering around 12 percent for the past two months, employers will have to really pay for the extra help.