One solution to the labor shortage: teenagers

  • Worker shortages are a big problem for businesses heading into the busy holiday season.
  • Teenagers, who were less likely to be looking for jobs before 2021, are now stepping back into the labor force.

Amid the nationwide labor shortage, businesses are tapping an unlikely pool of talent: teenagers.

Alonzo Soliz, who runs two Tropical Smoothie Café franchises in Cedar Park, Texas, said teens now comprise 90% of his workforce.

"We couldn't get anyone to apply and when we did start hiring people, everyone wanted higher wages," he said.

Soliz bumped the pay to $11 to $14 an hour, nearly double the minimum wage in Texas, and offered perks like free food and flexible schedules to entice more students looking for jobs after school.

"For high school kids, this is right up their alley," Soliz added.

"Not a lot of adults want to jump off the sidelines to take these jobs," said Alicia Modestino, an economist and professor at Northeastern University in Boston.

"Teenagers are suddenly in high demand."

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Heading into the holiday season, the unemployment rate among teenagers stands at 11.9%, according to the Bureau of Labor Statistics, the lowest rate in October since 1968.

"What we're seeing now is an echo of what we saw this summer," Modestino said.

In July, teen employment, which generally rises in the summer and the winter months, spiked as the labor crunch took hold.

Now, teen employment is picking up again, and even earlier than usual.  

Between September and October, the hiring of teens jumped 6%, double the rate in 2019, before the pandemic caused labor shortages, according to data from payroll provider Gusto.

Teenagers between the ages of 15 and 19 are also making up a larger share of the workforce, accounting for 13% of all hires in the retail sector as of October, compared to just 6% two years ago, Gusto found.

"Small businesses that might not have thought about hiring these teenagers are now opening their doors," said Luke Pardue, an economist at Gusto.

"It's not just limited to holiday retail jobs; there are a variety of different businesses that are short-staffed and looking to hire," said Greg McBride, chief financial analyst at Bankrate.com.

Businesses large and small are experiencing either significant or moderate staffing challenges. As a result, many are hiking pay, offering bonuses and lowering their age requirement to find workers to meet customer demand.

Current openings at Amazon, Target and Walmart are offering as much as $18 an hour in addition to tuition reimbursement benefits to help with the cost of school.

Overall, employers are paying a premium compared to pre-pandemic levels, Gusto found. Average wages for teenagers in the retail sector were $10.26 in October, up from $9.40 in March.

"That creates ample opportunities for teens looking for part-time employment," McBride said.

"Be a sponge, soak up as much experience, training and skills as you possibly can," he added. "This will be an investment in your future employability."

In general, though, teenagers are less likely to be looking to work, according to a study by the Hamilton Project and Brookings Institution.

The share of teens participating in the labor force peaked 40 years ago and declined steadily until the pandemic. Only in 2021 did the labor force participation rate among teenagers start to rise again.

In 1979, nearly 60% of American teenagers were employed, an all-time high. Today, just over one-third, or 36%, of teens between the ages of 16 and 19 are part of the workforce.

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