When we look at the teen employment rate — or, as we more affectionately know it, the employment-to-population ratio for ages 16 to 19 — two trends stand out: The millennial collapse. And the Gen Z rebound.
How Gen Z teens accidentally blew up the myth of the lazy millennial
Analysis by Andrew Van Dam
July 22, 2022 at 6:00 a.m. EDT
These trends trigger an obvious question: What the Sam Heck happened with millennials?
Our first instinct, informed by endless stories of helicopter parents and padded college applications, was to look at what economists might call supply factors: Why weren’t millennials willing to work?
Indeed’s AnnElizabeth Konkel, a creative and curious labor market economist and honest-to-goodness millennial, immediately pointed to education as the cause. Millennials set new high-water marks for high school and college graduation, and it’s harder to work when you’re in school.
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Our analysis of Labor Department data backs her up. The share of 18-year-olds in school rose about 13 percentage points during the millennial era. But that doesn’t explain the entire drop of about 17 percentage points in that age group’s employment rate. Especially since many students balance school and work, and Gen Z 18-year-olds have seen substantial workforce gains without a substantial accompanying decrease in schooling.
Part of the drop might be due to increased demand for extracurricular activities, according to Konkel and fellow millennial economist Luke Pardue, of the payroll and benefits provider Gusto.
“Within this generation, which I’m a part of, there was so much competition to sacrifice everything and have great extracurriculars and good grades and do everything in school that was necessary to get to some kind of competitive college,” Pardue said.
That argument is persuasive. But, at best, it’s a partial explanation because Gen Z has managed to work even as competition for selective colleges escalated.
So we called Tim Wolfe, dean of admission at Virginia’s William & Mary. He said he’s skeptical of claims that college admissions decisions are behind massive societal shifts. Only a small minority of teens apply to the sort of elite institutions that expect you to be captain of the squash team and a published author by age 17. And even at elite schools, Wolfe said, work experience can be as important to the application as any other activity.
“I would not think that college applications are a driving factor in employment trends for teens,” Wolfe told us.
Teen schedules overloaded with mock parliaments and badminton practices were part of the explanation, but something else had changed between millennials and Gen Z. To figure out what was going on, we called some zoomers. This column isn’t called the Department of Anecdotes, but when the data aren’t making sense, the best move is to speak directly with the human beings behind the numbers.
Dallas 17-year-old Malachi Allen, who kept calling us “sir,” recently started a job at Smoothie King after a six-minute interview during which he negotiated what would eventually be an extra $1.50 an hour. Allen seemed to take for granted that teens with little work experience would jump at a job offer, no matter what generation they came from.
We asked for clarification: Was he saying that teens in 2008 would have been just as eager to work as he was in 2022? And that the only difference is that he got a job offer and they didn’t?
“Yes, sir,” Allen said. “Also, the fact that we’re getting paid more as well, either because jobs are more desperate and trying to give us more money, or just simply inflation.”
About 40 minutes to Allen’s north, in the suburb of Allen, Tex. (no relation), Jason Cabrera, 20, knows the teen workforce inside and out. “Inside” because until his most recent birthday, he was a teen worker himself. And “out” because he’s been a general manager at Layne’s Chicken Fingers since he was 19, hiring and managing a largely teen workforce, first at a store in Allen, and now in nearby Lewisville.
Cabrera used to see dozens of applications each week and could take his pick of industry veterans. These days, he’s lucky if he sees a single application. These worker shortages make businesses like Layne’s far more willing to accommodate the hassles inherent to hiring modern teens, who spend nine months of the year juggling school, sports and outside activities.
But “once summer hits,” Cabrera said, “most of these kids just want to work, and that’s all they want to do.”
The zoomers were consistent: It wasn’t teens who changed, it was businesses. So, we got on the phone again.
Lyn James owns Flowers & Cappuccino by Lasting Visions, a bright spot of floral arrangements and fancy coffees in Bowman, a rural hub of 1,470 on North Dakota’s rolling western plains. (She’s also Bowman’s mayor.)
In the past, James said, she struggled to find teen workers. It’s impossible to build a regular schedule around their myriad obligations at school, in the community, and at their homes and ranches.
But with workers in short supply, teen hiring became a necessity. So James embraced flexibility: She began drawing up schedules that accommodated teen activities and hired a mix of young folks involved in different sports and clubs who don’t all need to be off at the same time.
“We still have good coverage and staffing, and yet the kids can still be kids,” James said.
Other businesses told a similar story. Around the time zoomers started returning to the workforce, the competition for workers heated up, and folks who mastered teen hiring had a significant advantage.
For example, when Chad Simmons and his wife, Carol, started Sugapeach a decade ago, serving soul food — fried fish, fried chicken and sides — in the fast-growing Iowa City suburb of North Liberty, they didn’t need teenagers. “It was easy to find people with experience at the price point that we at the time were needing to pay,” Simmons said. “We could always pay at around the minimum wage and still find people.”
But as the economy improved, older workers were drawn to higher-paying work at manufacturers and distributors. So Simmons got creative. Drawing on skills honed in his previous career as a human-resources professional, he launched Scholars Making Dollars, a program to train and mentor high school freshmen. In just a few years, the high-schoolers in that program have matured into a pillar of his business model.
“We started putting a development component in there, trying to make sure that they’re all set up to do well in high school and then go to college,” Simmons said.
Payroll data from more than 200,000 businesses using Gusto shows a similar trend nationwide. In April 2019, teens made up about 2 percent of new hires on their platform, said Gusto’s Pardue. By this April, the teen share of new hires had more than quadrupled to 9 percent. Wages grew faster for teens than for any other age group.
“What we’re seeing across all industries, really, is that teens are stepping up to fill this gap as older workers age out of the workforce or are either still unable or unwilling to come back,” Pardue said.
So, if school and extracurriculars don’t actually keep teens from working — as long as businesses are willing to hire them — maybe this isn’t a supply problem at all. Maybe millennials’ notorious, generation-defining exit from the teen labor force was always about demand.
When demand for workers changes, teens feel it first. They’re more exposed to the cruelties of the economic cycle than any other group. And millennials have had worse economic luck than any other generation in history.
Millennials entered the workforce amid two significant recessions and the jobless recoveries that followed, meaning they were always pitted against legions of laid-off, more-experienced workers, said Northeastern University economist Alicia Sasser Modestino.
Millennial teens also faced stiff competition from another huge reservoir of talented, hard-working adult competitors, said Hande Inanc, a Mathematica senior researcher who tracks youth unemployment trends. The immigrant population soared throughout the millennial era, with the foreign-born share of the population peaking in 2018 at its highest level since at least 1850. It has declined since, due in part to Trump-era immigration policies and restrictions related to the coronavirus pandemic.
Meanwhile, many of the entry-level jobs that drew Gen X into the workforce began evaporating as millennials hit the job market, Modestino said. Low-wage teen workers at video-rental stores were replaced by a few high-wage adult programmers at a few video-streaming giants. Paper carriers were similarly phased out in favor of highly skilled adults who make newspapers available online, delivered by internet protocols rather than by bicycle.
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