For the past four and a half years, teen unemployment has exceeded 20%. As of April 2013, 24.1% of teens seeking jobs were unable to find work, according to a report released this week.
This is the worst environment for teens seeking a job on record, according to nonprofit public policy research organization Employment Policies Institute, which released the report on teen unemployment. In some states, the jobless rate among teens is even higher. In California, an average of 34.6% of teens looking for jobs in 2012 were unemployed. Based on the 2012 average unemployment rates for 16 to 19 year olds, these are the states where teenagers cannot find work.
According to Employment Policies Institute (EPI) Research Director Michael Saltsman, the lack of teens with jobs does not just mean they are going to have less summer spending money. The trend also means that this generation is more likely to lack crucial job experience and connections that could help them in future employment.
“Some people call it ‘soft skills’ and economists call it ‘the invisible curriculum,’” Saltsman said. “But whatever you want to call it, there are a certain set of skills that teens who miss out on them are at greater risk of being unemployed now and in the future.”
The EPI report suggests that a worsening teen job market may be a product of higher minimum wages in these states. However, the data is less clear. In fact, only half the states with the highest teen unemployment rates do not impose a minimum wage higher than the federal minimum of $7.25 an hour.
One factor that Saltsman suggests is behind the record teen unemployment is the overall poor economic conditions in the country, conditions that began in the Great Recession and continue today with a painfully slow recovery. Teens usually work in the leisure and hospitality and retail trade industries, industries that have taken a hit during the recession. Moreover, with the overall labor market also in trouble, more out of jobs adults are willing to take on lower-paying jobs traditionally held by teenagers.
“There’s no question that the teen unemployment rate is high right now,” said Jack Temple, policy analyst at The National Employment Law Project. But it is always high when there is a shortage of jobs. “We have an elevated unemployment rate for workers across the country. Whenever there is elevated unemployment, teen unemployment goes particularly high.”
As the teen unemployment rate has risen, the proportion of teens in the jobs they traditionally occupy — leisure and hospitality and service jobs — has fallen. “For the last ten years, teen share of employment in these industries has fallen anywhere from three to four percentage points,” Saltsman said. In 2003, 14.5% of Californians 16 to 19 year olds were employed in the retail and hospitality business. By 2011, that figure had dropped to just 9.6%, compared to a national rate of 14.4%. In South Carolina, the proportion of teen workers in retail fell from 11.3% in 2003 to just 5.2% in 2011.
The reason the share of teens in these industries has dropped, explained Saltsman, is because the economic downturn led to increased competition. “Older workers are going part-time maybe because they can’t find another position,” Saltsman said. The fact that most of these states have among the highest unemployment rates in the country reflects this.
An additional factor that may make matters worse for teens is educational attainment. The majority of the states with the highest teen unemployment rates had lower high school graduation rates than the national average in 2011. Of the 10 states with the lowest teen unemployment, only one had below-average high school attainment.
Based on information provided by MinimumWage.com, a project by the Employment Policies Institute, 24/7 Wall St. reviewed the 10 states where the unemployment rate among teens was highest. EPI also provided 24/7 Wall St. with data on minimum wage laws by state as well as figures on teen employment and general employment breakdowns created from the current population survey. Figures on the proportion of teenagers in certain job categories was for 2011, the most recent available year available. Education and poverty figures are from the U.S. Census Bureau’s 2011 American Community Survey. Annual average unemployment rates by state are from the Bureau of Labor Statistics.