Marketplace Today Blog

The recession, which has already caused payrolls to shrink by more than five million jobs, will make it extremely difficult for teenagers to find employment this summer, according to an outlook released Tuesday by global outplacement consultancy Challenger, Gray & Christmas, Inc.

Based on recent trends, it is possible that for the first time since 1954 fewer than 1,000,000 16- to 19-year-olds will find summer jobs. The impact of this will only add to the economy’s woes, as jobless teenagers are less likely to spend money on clothes, music or entertainment.

Last year, employment among 16- to 19-year-olds grew by only 1.15 million between May and July, according to non-seasonally adjusted data from the Bureau of Labor Statistics. That was 29 percent lower than 2007, when 1.64 million teens found jobs during the summer months.

Bureau of Labor Statistics data show that teen employment is already significantly lower than a year ago. As of March 31, 4.7 million 16- to 19-year-olds were employed, 11.6 percent fewer than the 5.3 million teens working at the same point in 2008. The non-seasonally adjusted unemployment rate among teens averaged 21.9 percent through the first three months of 2009, compared to 16.9 percent during the same period a year ago. That figure is expected to increase this summer when teens on summer vacation flood the job market.

“The job market has become increasingly tight for teenagers,” said Challenger, Gray & Christmas CEO John Challenger. “The types of jobs they typically seek in retail and food service are being eliminated as consumer spending plummets. For the jobs that remain, teens are competing not only with other members of their age group, but also with older, more experienced job seekers willing to accept positions for which they are most likely overqualified.

“Even one-time teen job havens, such as pool lifeguard and camp counselor, are seeing cutbacks. States and municipalities that were likely to hire summer interns have now cut their budgets in light of falling tax revenue. The competition for the jobs that remain is fierce.”

The participation rate among teens has steadily declined in recent years. In June 2000, about 52 percent of 16- to 19-year-olds were working or looking for work. By June 2006, when the economy was still relatively healthy, the teen participation rate had dropped to 44.4 percent.

“However, the downward trend appeared to be a matter of choice among tech-savvy, career-oriented teens, who abandoned flipping burgers and folding shirts,” said Challenger. “With the recession, more teenagers need jobs out of necessity, but are unable to compete against more experienced applicants.

“Rising unemployment among teens is troubling for many reasons. Many retailers depend on teen spending. In the past, teenagers could count on getting spending money from mom and dad, when they weren’t able to find a job. However, many parents are reining in these costs as job loss or the fear of job loss contributes to greater budget awareness.”