'Last to be hired, first to be fired': Summer job market has been scorching hot for Gen Z, and it could stay hot well into fall — here's what to watch for on the horizon
The number of American teens landing summer jobs hit yet another growth spurt this year, proving they’re still here to work after they surged into the U.S. labor market during the COVID-19 pandemic.
Rewind to June of 2019, teens aged 15 to 19 years old accounted for a little over 2% of new hires in the U.S job market for that month, according to data from HR and payroll company Gusto. Fast forward to June 2022 and that number ballooned to 15%.
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This year the number of working teens grew again. The data shows that they accounted for 18% of new hires in June — when teen hiring usually peaks.
“The degree to which businesses continue to look to teens three years after the pandemic indicates that the rise in teen hiring is not a pandemic-related blip but a long-term trend,” Luke Pardue, Gusto economist and author of the teen hiring report, told Moneywise in an email.
And not only are more teens working, they are getting paid more. Despite pay for new hires falling overall in 2023, Gusto forecasted teens looking for jobs this summer could expect, on average, 9% higher wages than last year.
But while demand for teen workers may persist — even into the fall — here’s why young Gen Zers need to be prepared for the market to cool off along with the weather.
Strong demand for teen workers
While inflation is coming down, businesses may still be looking for ways to cut costs while filling job vacancies — and young Gen Zers offer the best of both worlds.
“Businesses keeping an eye on their bottom line have found that teen workers offer immense value amid rising prices,” Pardue said, noting the average hourly wage for a part-time teen worker (between 15-19 years old) was $15.71 in May 2023, compared to $27.10/hr in May for part-time workers who were 25-54 years old.
Alicia Modestino, an economist at Northeastern University, told Moneywise she has seen young workers move into higher-level positions in restaurants and retail, or secure paid internships at professional firms. Some young people are even turning down job offers from summer youth employment programs because they can find a job that pays a higher wage elsewhere.
In Boston, Modestino says, youth leaders earn $17/hour, but Target and other big-box retailers may offer salaries at around $20/hour, which can be hard to pass up.
Some employers are even offering more incentives to snag teen workers. Connecticut’s Department of Energy and Environmental Protection (DEEP) has been offering paid training and upping salaries for lifeguards to draw more applicants, and this year, it’s offering a starting pay of $20/hour.
Sarah Battistini, water safety coordinator for DEEP, told Moneywise that lifeguards at Rocky Neck State Park, for example, can typically look forward to a 25-cent increase in pay rate each year.
That said, demand for teen workers hasn’t necessarily been equitable. In the latest jobs report from the Bureau of Labor Statistics (BLS), the unemployment rate for Black teens was 20.7% — drastically higher than the 9.5% rate reported for white teens. Modestino says summer youth employment programs, which receive federal and state funding, can help reduce such gaps and may even boost employment and wages for young people down the road.
Read more: 'Embarrassing': Young Americans are wasting money on silly things — like TikTok 'pink sauce' and Candy Crush. 3 key lessons they should steal from baby boomers
Summers jobs provide valuable experience
Pardue says summer jobs help teens build professional skills that they can rely on when they seek out internships or full-time jobs later on.
For Ryan Anderson, a 19-year-old senior lifeguard at Rocky Neck, there’s tremendous value in being a lifeguard — especially since he expects to enter the health-care field after graduating from college.
Anderson says Rocky Neck provides the kind of workplace and community he’d strive for in his future career as well. “I'd love to be in an environment like this where I work with a team and we're able to help people everyday.”
Anderson, who says he started working as a lifeguard four years ago at $12/hour when he was 16 years old, has additional EMT training and has worked his way up to $21/hour.
Ben Schies, another 19-year-old lifeguard who joined Rocky Neck just last year, works as a server at a restaurant during the winters as well.
Like Ben, the need for employment doesn’t end with the summer season for many young people.
Summer is ending, now what?
Pardue predicts the surge in teen hiring will persist even once the school year begins. The data shows that in October of 2022 9% of hires were 15-19 years old, compared to 5% in 2021 and just 1% in October 2019.
With colleges beckoning many students back to the classroom next month and tuition top of mind for many teens and their parents, bringing in cash over the summers or with part-time jobs in the fall can help them cover some of those post-secondary costs.
With the federal student loan rate for undergraduates rising to 5.5% and average private loan rates rising to the 7-10% range, summer work can be crucial if you want to avoid taking on student debt that can take years to pay off.
But, Modestino notes demand for teen workers depends on the country's overall labor trends.
The labor market remains strong but is showing signs of cooling. While BLS data shows the unemployment rate saw little change in July (3.5%), 187,000 jobs were added.
If U.S. employers end up needing to pull back on hiring, teens may land at the bottom of the career ladder once more.
“Their fate is entirely tied to what's happening in the labor market,” Modestino said. “They're always the last to be hired, the first to be fired.”
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
