Unexpectedly Intriguing!
August 22, 2018

First the good news, as reported in the Boston Globe: Now hiring: teenagers (and anyone else willing to work).

After years of falling employment rates, the share of teens with jobs has been rising in a historically tight labor market where the number of job openings exceeded the number of job seekers for the first time on record this year. From May to July this year, hiring of 16-to-19-year-olds increased nearly 8 percent nationwide over last summer — the highest number of teen jobs added since 2012, according to the outplacement firm Challenger, Gray & Christmas.

The details provided by Challenger, Gray & Christmas on the 2018's teen hiring boom look even better.

Teen hiring in July rose 62 percent from the 190,000 jobs added in the same month last year, as 307,000 workers aged 16 to 19 found employment, according to analysis of non-seasonally adjusted data from the Bureau of Labor Statistics by global outplacement and executive coaching firm Challenger, Gray & Christmas, Inc.

This summer saw 1,388,000 jobs gained by teens, 7.8 percent higher than the 1,288,000 jobs gained by teenagers last summer. It is the highest number of teen jobs gained since 2012, when 1,397,000 jobs were added.

“Some retailers announced they were beginning to hire for the holiday season early, a boon to teen workers who want employment,” said Andrew Challenger, Vice President of Challenger, Gray & Christmas, Inc.

We've been tracking the teen employment situation in California for years, so after coming across this headlines, we were looking forward to seeing how the job market for one out of every eight teenagers in the U.S. was doing, especially since the state just reported its employment data for July 2018.

Unfortunately, the teen job scene in California is continuing to show signs of struggling, even though nationally, the news indicates that teens seeking jobs are increasingly getting hired.

California Teen (Age 16-19) Labor Force and Total Employed Trailing Twelve Month Average, January 2004 - July 2018

As you can see from the data published by California's Employment Development Division, both the size of California's teen labor force and the number of employed teens in the state has declined since the beginning of 2018, continuing a long term trend after a minor rebound at the beginning of the year.

Those falling numbers however are in part attributable to a significant decline in California's population of 16 to 19 year olds, much of which appears to have taken place since mid-2017. To account for the effects of that population decline, we've calculated the percentage of the teen labor force and the teen employment ranks as a percentage of California's teen population, which we've presented in the next chart.

California Teen (Age 16-19) Labor Force and Total Employed as Percentage of Age 16-19 Population, January 2004 - July 2018

Here, we see that after accounting for the falling size of the state's teen population, the percentage of teens participating in California's labor force has been falling since the beginning of 2018. That trend suggests a continuing weakness in California's job market for teens.

In looking at the trend in the percentage of Californian teens with jobs, we find that after having bottomed in early 2017 and rebounding through the end of that year, the trend in the growth of California's employed teens has decelerated in 2018, where we would characterize the employment data through July 2018 as either only very slightly rising or running flat when compared with 2017.

What California's teen employment situation data indicates is that the increase in teen jobs reported by Challenger, Gray and Christmas for the 2018 summer hiring season is not being universally shared across the U.S. teen population, where California's teen job market would appear to be lagging behind. In California, less than 23% of the state's trailing year population of 16 to 19 year olds was counted as employed in July 2018. In the rest of the United States, the figure is over 31%.

That's the glass-half-empty interpretation of the data. The glass-half-full interpretation is that a flat or very slowly rising share of employed teens is not the falling trend that we might expect when the teen labor force-to-population percentage has been falling. That combination suggests that the teen employment situation in California is stronger that it would at first appear.

The real question is how long might the declining participation of teens in California's labor force continue? At some point, if the teen job market is genuinely improving, we should be seeing the percentage of the teen population in the labor force rise as employers do more to incent teens to come work for them, where more teens would respond to those incentives and the improved prospects of getting a job by joining the labor force.

For that to happen, California's teen employers will have to have an improving business outlook, where the amount of revenues they expect to make can justify the cost of hiring and training the least-educated, least-experienced, and least-skilled members of California's work force: teenagers.

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