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Teen Hiring Spiked in April as the Labor Shortage Continues

Luke Pardue Economist, Gusto 

Key Findings

  • Companies are increasingly hiring teen workers: Gusto platform data indicates that we are seeing a continued surge in teen employment, as hiring of 15-19 year olds in April 2022 is four times greater than 2019 rising from 2% to 9.3%
  • Teens are moving from the checkout counter to checking email: The labor market for teens has always been strong across Personal Services firms (i.e. retail, hospitality, entertainment companies) and continues to strengthen. However, teens are increasingly being hired by Professional Services firms (i.e. accounting, and law firms) where they have historically accounted for a much lower share of new hires. 
  • Increased demand means higher wages for teens: Wages for teenagers are rising as companies increasingly look to hire these workers. Wages for teens grew four times faster than average wages among all workers from January through April 2022.

The number of job openings and quits reached new highs in March further fueling the labor shortage, according to government data. As workers continue to leave their jobs for better opportunities and others seemingly exit the workforce altogether, there is a growing need for more workers across industries. Last year this led to an increase in teens being hired and Gusto data shows teen workers (15-19 years old) are becoming an even larger share of new hires in 2022.

In April 2022, 15-19 year olds made up 9.3% of all new hires among companies using Gusto’s platform, increasing from  7.7% in April of last year and nearly four times greater than the 2.0% before the pandemic, in April 2019. This rise in teen hiring comes as we see a decrease in the share of new hires in the 25-54 years old age range, falling from 75.3% in April 2019 to 62.9% in April 2022.

Figure 1: Share of New Hires 15-19 Years Old and 25-54 Years Old: All Industries

Teen hires have historically been concentrated in industries that rely on part-time and seasonal workers, including retail, hospitality, food and beverage and other personal services related companies. As displayed in Table 1, the top 5 industries for teen employment are Food & Beverage (employing 27% of all 15-19 year old workers), Retail, Healthcare & Social Assistance, Education, and Sports & Recreation. As these businesses have struggled to hire workers they’ve ramped up hiring of teen workers. Gusto data shows in April 2019, teens only made up 4.0% of new hires in Personal Services, and that share soared to 16.1% in April 2021 and has continued to grow in April 2022 reaching a new high of 18.7%.

Table 1: Top 5 Industries for Teen Employment, April 2022

We are also seeing a shift towards professional services firms, such as accounting and law firms, hiring more teen workers.. From April 2019 to April 2022, the share of new hires in Professional Services firms who are 15-19 years old has increased from 1.1% to 5.9%. This significant growth further showcases how the current labor market conditions are expanding employment opportunities for teens.

Figure 2: Share of New Hires 15-19 Years Old and 25-54 Years Old: Personal Services

Finally, as businesses have increased wages to be more competitive for talent in a tight labor market, teenagers are seeing above average growth in pay. Among all 15-19 year olds, average hourly wages have increased 2.8% since January 2022, from $14.11/hr to $14.47 in April 2022. That increase is four times greater than the 0.8% rise in wages we have seen among all workers, who have seen wages rise from $32.30 in January to $32.53/hr in April. This wage increase for teenagers is greatest in Professional Services, where average hourly wages have risen 4.3% since January, from $14.95/hr to $15.60/hr. There has also been robust wage growth in Food & Beverage, where wages have increased 3.2%, from $14.63/hr to $15.09/hr. Wage increases in retail have been somewhat slower at 1.3%, rising from $13.27/hr to $13.44/hr.

Figure 3: Average Hourly Wage, 15-19 Year-Olds, by Industry Group

Overall, businesses across industries are increasingly looking to teenagers to take on more roles in an increasingly tight labor market. A solution that has proven to be mutually beneficial for teens who are largely seeing higher than normal wages and increased flexibility from employers.

Luke Pardue
Luke Pardue Luke Pardue is an Economist at Gusto, researching how public policies help small businesses and their workers thrive. He received his Ph.D. from the University of Maryland, where he studied the effects of government programs on disadvantaged populations' housing and labor market outcomes. Luke currently lives in Washington, D.C.
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