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Teens disappearing from U.S. workforce as school dominates

By Jeanna Smialek
Bloomberg News

WASHINGTON In Detroit, Akil Alvin, 19, is struggling to land a job as he competes with older, more skilled applicants. Alex Lothspeich, 17, of Charlotte is choosing not to enter the workforce to focus on high school.

Both illustrate changes sweeping the teen labor force. Young Americans such as Alvin who want to work can’t find jobs as unemployment among 16- to-19-year-olds stands at more than three times the rate for all workers. At the same time, more teens are taking Lothspeich’s tack, forsaking paid positions to concentrate on getting into college.

Just 1 in 3 teens worked or looked for a job in January, a record low since 1948 when the Labor Department data starts. That lack of on-the-job experience could cost future workers, who may lag behind on basic skills their parents developed waiting tables or running registers, some economists say.

“Work experience complements skill, and the combination of the two is more valuable than either one alone,” said Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce. “It is more difficult to get going, to get onto the on-ramp, in the American economy than it used to be.”

Teen labor-force participation plummeted during the 18-month recession that ended in June 2009 and has continued to fall, accelerating a two-decade-long decline. The drop started in the 1990s as college enrollment rates climbed. In January, 33.3 percent of those ages 16 to 19 were in the workforce, compared with 59.3 percent in 1978, the highest share on record.

What has changed “is the degree to which youth combine school and work,” economist Alicia Sasser Modestino wrote as a co-author in a December report published by the Boston Federal Reserve Bank. “Going to school has become the de-facto youth activity.”

Focusing on school

The share of 16- to-19-year-olds who cited going to school as their reason for not working rose to 89 percent in 2012 from 87.7 percent in 2000, based on the Boston Fed study’s analysis of Current Population Survey data.

“They are making the bridge from schooling to the workforce later in their lives,” John Challenger, chief executive officer of Challenger, Gray & Christmas Inc., said. “Now they’re doing more homework than they used to, they join sports teams, they do more volunteer work,” he said in an interview about the Chicago-based employment consulting firm’s analysis of the teen workforce released Tuesday.

Lothspeich, a senior at Charlotte Catholic High School, doesn’t hold a formal job. He does have a tae kwon do black belt, a National Honor Society membership, and acceptances to both N.C. State University and UNC Chapel Hill.

“We’ve always said, your priority is to make the grades to go college,” said Ana Lothspeich, Alex’s mother. His brother, Matthew, is 16 and also doesn’t work. “We had that conversation with them early on, as soon as they turned 16.”

Discouraged by market

For others, not working is economy-driven. The teen unemployment rate, the gauge of those looking for work and unable to find it, was 20.7 percent in January. While that’s down from a 27.3 percent peak in October 2010, it’s up from as low as 14.8 percent in 2007, before the recession began.

High school counselor Jessica Vogt says she sees students who can’t find jobs sometimes dropping out of the workforce.

“Some do just check out of the process,” said Vogt, an officer with the Virginia School Counselor Association.

The scarcity of teen employment isn’t solely a legacy of the latest recession, Sasser Modestino said in an interview.

Jobs traditionally held by teens are “in declining industries – where workers are being replaced by technology and/or outsourcing – or in growing industries that appear to be employing other types of workers, such as young adults or immigrants,” the Boston Fed report said. Teens saw a broad- based decline across sectors between 2000 and 2006, the report found.

A sobering future

For young people who give up on work amid fewer opportunities, repercussions may follow. Idle youth, those neither in school nor working, probably face the worst penalty, said Henry Levin, a professor of economics and education at Columbia University in New York. The share of 16- to-19-year-olds not in school or at work climbed to 8.7 percent in 2010 from 7.9 percent in 2006, based on Sasser Modestino’s analysis.

Sixteen- to 24-year-olds who aren’t in the workforce, training or school have lower future wages, found a 2012 paper of which Levin is a co-author. The penalty grows with time, he said.

“It sets a pattern, so that it’s not just that they’re going to bounce back,” Levin said in an interview. “You establish a lifestyle.”

Those who lack work experience and don’t go to college could find jobs hard to come by upon graduation. The unemployment rate for those age 25 and older with a high school diploma was 6.5 percent in January compared with 3.2 percent for those with a bachelor’s degree.

Starter jobs probably won’t cost those who earn a college degree, said Harry Holzer, a professor of public policy at Georgetown University in Washington, and former chief economist at the U.S. Department of Labor.

“If you’re going onto college anyway, especially a four-year college, and the job you would have is serving up pizza slices, then you’re not missing out on anything important,” he said.

Business leaders say applicants lack interpersonal skills: In a survey of 500 senior executives in the U.S., 44 percent of respondents cited “soft skills” such as communication and collaboration as the biggest skills deficit.

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