The Sunshine Economy: The Disappearing Working Teenager

Oct 1, 2017

Harold Valderrama is unlike most teenagers in South Florida: He has a part-time job.

He is 19 years old, goes to school at Miami Dade College and makes $12 an hour working as a studio coordinator at FlyWheel Sports in North Miami. He cleans the exercise bikes, barre studios and showers. He helps clients with the equipment and checks people into their exercise classes.

At the beginning of this century, just over half the teenage population was considered part of the workforce. Nationally, that has fallen to one third and the Bureau of Labor Statistics predicts by 2024 only one out of every four American teenagers will be considered part of the country’s workforce.

This drop nationwide mirrors what the South Florida economy has experienced. Over the past decade, the workforce participation rate for teens in Palm Beach, Broward, Miami-Dade and Monroe counties has been falling. It began shrinking before the Great Recession and, except for a year here and there, has continued to trend lower even as the national and regional economies have rebounded, creating thousands of new jobs.

Of course, most of those jobs created aren’t appropriate or even relevant for teenagers. But consider that the highest growth rate in jobs over the past decade in South Florida is for work in general retailing. Jobs in grocery and other food stores also have grown faster than the overall job market. These are businesses that traditionally have been places where teenagers can find work.

To Work Or Not To Work

"I think work is important because it teaches you certain lessons in life like discipline," said Valderrama.

Why teens are not working or interested in working is complex: The Great Recession kept older workers in the job market longer and school academic demands are higher than they were a generation ago. Some schools require volunteer hours for graduation, cutting into available job time.

"I just want to see if I can earn some money and learn how to manage my money" - Andres Baquero

There are economic reasons for teens to work -- they or their families need the money. And there are social reasons to work -- to get the experience of working.

Sixteen-year-old Andres Baquero of Palmetto Bay landed a job at a local McDonald's this summer making about $9 an hour. "I just want to see if I can earn some money and learn how to manage my money," he said.

Zoe Stephan is a freshman at the University of Miami. She spent the summer where she has spent most summers over the past several years -- at a summer camp outside of Seattle. But this time she was a camp counselor earning a paycheck for watching over younger campers. When she was in high school in Miami, she worked as a receptionist at a martial arts studio. She describes the choice to work as a teenager "personal. It depends on stuff like if you need the money, if you're going to school and you need to pay tuition But also can you handle this with your studies?"

Colby Essue is figuring that out during her senior year of high school in Fort Lauderdale. She works at Beehive Kitchen, a locally owned fast casual restaurant making $8.10 an hour plus tips. "I wanted a job for as long as I could comprehend the concept of a job," she said.

Falling Unemployment, Falling Participation

This summer the unemployment rate among teenagers dropped to its lowest level since the summer of 2000. Nationally, the unemployment rate for teens in July was 13.2 percent.

July is an important month to measure the teenage job market. It’s the height of summer, so if a 16-, 17-, 18- or 19-year-old can’t or doesn’t want to work during the school year, summer is the time to be in the workforce.

 

The good news for teens and working is that the unemployment rate has been falling. As recently as just three summers ago, the national teenage unemployment rate was over 20 percent.

 

Unemployment rate for 16 to 19 year olds (click on image to expand)
Credit Federal Reserve Bank of St. Louis

But the falling unemployment rate masks the dropping proportion of teens interested in working.

 

 

During the summer, presumably when there are more teenagers available to work because they are out of school, the participation rate -- while it has been climbing over the past six summers -- remains well below where it was before the Great Recession. In short, a lower share of teenagers are interested in working.

The shrinking workforce participation rate for 16 to 19 year olds (click on image to expand)
Credit Federal Reserve Bank of St. Louis

Economists have a phrase called “opportunity cost.” Basically, it’s the idea that making one choice, means you give up the benefit of something else. Taking a job as a teenager may mean money in one's pocket and developing social skills as a member of the workforce, but less time for school and extracurricular activities. Is the benefit of one choice worth the cost losing out on another?

Put another way -- does a part time job for a teen compete with their education or complement it?