Youth unemployment rate drops to its lowest level in years

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The unemployment rate for workers aged 16 to 19 fell in May from 12.3% in the previous month to 9.6%.

If that doesn’t sound striking – especially when the overall youth and adult unemployment rate is now 5.8% of the pandemic – here is a context:
The rate surpasses the 29.6% unemployment rate for the population at the same time last year when the country was first hit by the COVID-19 pandemic.

The current rate is also lower than the population group’s 12.3% unemployment rate in May 2019. According to the Bureau of Labor Statistics, 33.2% of the 16-19 year old population had a job last month. In May 2019 it was 30.2%, as BLS figures showed.

The unemployment rate for black teenagers was 12.1% in May, which Dean Baker, chief economist at the Center for Economic and Policy Research, described as “lowest in history.”

In fact, one has to go back to November 1953 to find a lower unemployment rate for all teenagers than it was 8.6%.

Of course, various metrics show recent periods of positive employment numbers for teens. For example, in May 2008, 34.1% of young people were employed and the youth participation rate – which includes the number of people who have or are looking for a job – was also higher than it is today.

Still, “the recovery was really good for her,” said Paul Harrington, a professor at Drexel University who researched employment trends among teenagers.

When the pandemic first broke out, teenage workers were showered with pink panties. Now the low interest rate is “good for teenagers, good for the economy, good for America,” said Harrington.

So what’s up?

Several factors play a role, according to Harrington and other experts.

Summer is approaching for starters and this is the time when teenagers traditionally take jobs. Nearly half of the youth workforce find jobs in the leisure and hospitality industries, Harrington found. Think of amusement parks, restaurants, fast food outlets, ice cream parlors, hotels, and tourist works.

In May, leisure and hospitality businesses accounted for 292,000 of the 559,000 jobs added to the economy when pandemic restrictions were eased, BLS said.

But employers are also grappling with labor shortages, and economists are discussing what this has to do with factors such as generous unemployment benefits and a lack of childcare options that keep prospective workers at home.

Youngsters can step in to fill a void normally filled by older workers. Employers in sectors such as the hospitality industry “could currently turn to workers who are more readily available, including teenagers,” said Daniel Zhao, senior economist at Glassdoor.

Some companies are now really trying to sweeten the deal. The convenience store chain Wawa z. B. plans to hire 5,000 new workers between March and June. “Wawa is one of those places that kids have always been hired,” said Harrington. (Wawa did not immediately respond to a request for comment.)

After falling sharply during the Great Recession, teen employment has rebounded slightly in recent years, data from the Pew Research Center showed.

But before the pandemic, teens were increasingly competing with older workers for jobs, Harrington noted. “The older worker between 2000 and 2020 really invaded the youth labor market.” Older workers, who are at greater risk of COVID-19 exposure even with increasing vaccination rates, may be seriously considering returning to these roles, he said .

According to polls by the Pew Research Center, the pandemic is accelerating retirement plans for some in the baby boomer segment.

Long-term effects?

Lower youth unemployment is “not clearly good news,” said Elise Gould, senior economist at the Economic Policy Institute.

On the one hand, the number of job seekers in this group even fell slightly from April to May. Some job seekers may see no opportunities and leave the workforce altogether, she said.

If young job seekers postpone their education or drop out of school to get a job, the move could in all likelihood harm them in the long run.

But if it’s a job that doesn’t sacrifice education, Zhao sees the spurt as a good thing. “Gaining more work experience early on can be an important step up,” he said.

Harrington likes what he sees because summer jobs are important first lessons about finance and career moves as teenage workers grow up.

“You develop knowledge of how the market works because you are actually in a market,” he said, and later added, “The more children, the better.”

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