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Teen Summer Employment Prospects in the COVID Economy

Luke Pardue Economist, Gusto 

The April 2021 Employment Situation Report released by the Bureau of Labor Statistics estimated that the US economy added 266,000 jobs in April, far below the 1 million or more jobs forecasters predicted. One bright spot in this report was the large jump in teen employment, with  workers 16-19 years old accounting for 256,000 of those jobs – over 96% of the total increase. This data suggests that, amid anecdotal evidence of worker shortages, teens are stepping in to fill the gap as business owners seek to expand but older workers remain either hesitant or unable to return to the labor force at this time.

Summer jobs are a rite of passage for many teens—an opportunity to earn a paycheck while learning valuable business and money skills. But during the COVID-19 pandemic, the summer jobs outlook for teens and young adults at small-and-medium-sized businesses has shifted. During summer 2020, teen summer employment prospects dimmed, with most of the businesses that typically hire teenagers—like hotels, boutiques, restaurants, movie theaters, summer camps, and theme parks—reeling from the impact of necessary shelter-in-place and social distancing orders. Gusto data shows, during the pandemic, furlough rates for 15-19 year-olds was 552% higher than the rates of workers 20 and older, and termination rates of these younger workers was 606% higher than those 20 and older.

This summer, there’s reason for optimism. Hiring in these harder-hit industries has rebounded in recent months and is returning to trends seen in years before the pandemic. Employment of 15-19 year-olds grew 10.2% in the month of April 2021 alone—on track with the hiring rate in April 2019 (10.1%). It remains to be seen, however, whether teen summer employment will continue to match or exceed growth in prior years, especially in Food & Beverage and Retail industries, which together employed 44% of all teen workers pre-pandemic. 

Gusto enables more than 100,000 small businesses across the United States to take care of their teams, with full-service payroll, benefits, compliance, expert HR and more. This report analyzes leading indicators and changes to employment at small-and-medium-sized businesses through April 2021. The findings reported below represent data points with meaningful sample sizes based on the distribution of Gusto’s customers.

Impact of the COVID Economy on Teenage Workers

This pandemic has impacted workers of different ages to different degrees. Here we examine the experiences of employees across the past year by age group: looking at workers just entering the labor market (teens and young adults) relative to those with relatively more experience (20 or older).

Table 1: Rates of Employer Actions by Age Groups, All Industries

During the pandemic, furlough rates for 15-19 year-olds was 552% higher than the rates of workers 20 and older, and termination rates of these younger workers was 606% higher than those 20 and older. Data points are relative to age-group trends from 2019-2020 to adjust for normal differences in these outcomes across these age groups.

Teen Workers and Summer Employment

Table 2 lists the top industries where teens working at small businesses were employed during February 2020, just as the coronavirus pandemic began. Almost one third (31.7%) of 15-19 year-old employers were working in one industry — Food & Beverage — followed by 12.5% at retail establishments. Because employment in Food & Beverage and Retail together accounted for 44.2% of teen jobs on the eve of the coronavirus pandemic, these young workers have had a particularly tough experience since then.

Table 2: Top 5 Industries for Teen Employment, February 2020

While working teens were dealt a particularly difficult hand during this pandemic, with the industries in which they typically expected to find jobs struggling the most during last spring and summer, there is reason for optimism as hiring in these industries has rebounded in recent months. Figure 1 plots net hiring trends among teens 15-19 over the past four years, from January 2017 through April of 2021. The seasonal trend in teen employment is quite apparent, as hiring picks up in April through August (highlighted) before dropping again during the Fall and Winter months.

Figure 1: Seasonal Employment Among Teen Workers

Most recently, hiring has returned to trends seen in years before the pandemic. In April 2021, employment of 15-19 year-olds grew 10.2% over last month, very similar to the hiring growth of 10.1% in 2019, but well above the average of 6.2% across April of 2017, 2018, and 2019. It remains to be seen, however, whether teen employment will exceed their summer growth rates in prior years, given the large recovery that is expected among businesses in the Food & Beverage and Retail industries.

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Updated: July 27, 2021

Luke Pardue
Luke Pardue Luke Pardue is an Economist at Gusto, researching how public policies help small businesses and their workers thrive. He is a PhD Candidate in Economics at the University of Maryland, where he studies the effects of government programs on disadvantaged populations’ housing and labor market outcomes. Luke currently lives in Washington, D.C.

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