Summer jobs for teens on the rise with increased wages and benefits

• New data reveals that teen workers have sustained their wage growth, which initially emerged as businesses faced challenges in hiring during the pandemic.
• In June, the average hourly wage for a new hire aged 15 to 19 was $15.68, which was a 36% increase from the beginning of 2019.
• Teen employment rates are also rising as companies boost pay and offer incentives.

As the head swim coach for a metro Detroit team, Dailey Jogan was thrilled to discover she would receive $15 an hour and several perks. However, her older brother's expression appeared more like astonishment.

Jogan, who is 18 years old, has spent the summer leading a team of 250 people as a staff member. Additionally, she receives freebies for facilities located within the park where they practice, such as access to the gym and a few comped movie theater tickets.

Her older brother earned $12 per hour five years ago, which is 20% less than her current wage of $15 per hour. Additionally, she had to pay for using the workout equipment or watching a film, just like everyone else.

""I was pleasantly surprised and feel valued," Dailey Jogan stated."

The rising pay and benefits for American teen workers indicate a shift in the job market due to the pandemic-induced labor shortage. Despite the easing of other Covid-related economic impacts, it seems that higher wages and extra perks are now the norm for young employees.

According to data from Gusto, the typical wage for a newly hired worker aged 15 through 19 in June 2021 was $15.68 per hour, which represents a 36% increase from the beginning of 2019.

Despite the overall growth rate of 27% in private payrolls over the past year, federal data shows that the rate of growth for all workers, regardless of age, has not kept pace with this increase. Additionally, Gusto statistics indicate that teenagers have been less affected by economic fluctuations that have negatively impacted the pay of some adults.

"Liz Wilke, Gusto's principal economist, stated that while she could exaggerate the benefits of the current labor market for teens, she believes it's significantly better than it was five or ten years ago."

Employers woo workers

To attract teens, businesses are now offering extra perks, such as gym and theater access, in addition to pay.

Since before the pandemic, workers at fast-casual chains have been eligible for a tuition reimbursement program. This year, the California-based company added a well-being offering that includes six free sessions with a licensed counselor or mental health coach. Additionally, Chipotle launched a match program where eligible employees who make payments on student loans will receive up to 4% of pay from the company in their retirement account.

Chipotle has added benefits to its U.S. restaurant workers after surveying them, with more than one-third being teens. Although these additions increase operating costs, Daniel Banks, head of global benefits, believes they are necessary to attract new hires and open more stores. Additionally, these benefits can improve worker retention, ensuring the smooth operation of existing locations.

Chipotle's education-assistance program has resulted in employees being two times more likely to stay and more than six times as likely to move into management roles. Additionally, Chipotle's turnover rates are near record lows, according to banks.

"We prioritize our culture and brand, and we strive to focus on internal promotions and hires," he stated. "By equipping those individuals with the necessary skills and resources to excel as leaders, we ultimately benefit the company as a whole."

Elsewhere, small businesses are trying to keep up.

Erin Powell's staff at The Sugar Shack, a small business in Minnesota, consists of nearly half teens who take on roles such as making coffee or baking pizzas. Powell accommodates vacation schedules, provides free menu items during shifts, and offers frequent raises. She also hosts holiday parties and aims to create a familial workplace atmosphere.

Although she tries to support her teen employees, she sometimes observes them leaving for higher pay at competitors like . Powell is torn between her commitment to her workers and the financial constraints of providing what she can without expanding.

"Powell stated that "big isn't always better" while emphasizing that "everybody's still competing for workers.""

To manage labor costs, she assumes responsibilities typically delegated to a manager. Powell has also attempted to reduce waste within the business to eliminate unnecessary expenses.

'The summer job is back'

Teens are increasingly being attracted to the workforce due to financial support for education or raises, which marks a significant shift from recent decades when this group experienced significant declines.

Government data reveals that at its peak this year, approximately 40% of this age group were employed, which is the largest share since 2009, but still falls short of the highs recorded in the late 1970s.

"The summer job is back," said Alicia Sasser Modestino, an associate professor of economics who studies youth development at Northeastern University. "I was completely wrong in the summer of 2021 when I said, 'Teenagers: just run out, grab these jobs, because this is not going to last.'"

According to the federal government, over 5 million teens were employed last year. Gusto predicts that sports and recreation, education, and food and beverage will be the most popular summer job sectors for teenagers.

Teens are increasingly showing up in non-traditional fields such as construction and nonprofit work due to a tight labor market, according to Gusto's Wilke. As long as the job market remains competitive, teens can continue to find these benefits and opportunities in the future.

The percentage of teen workers earning minimum wage has decreased significantly, with only about 3% of 16- to 19-year-old hourly workers earning less than or equal to the federal minimum wage last year, compared to nearly 20% in 2013. Despite the federal minimum wage remaining at $7.25 per hour since 2009, several states have established higher minimum wages.

Teens are usually at the lowest end of a company's pay scale, making it easier to implement significant pay increases. Additionally, businesses may be more inclined to provide large wage increases to younger workers since they often do not require additional benefits like insurance.

Recognizing 'a balance'

Although today's teenagers working have a lot of money to spend, the increasing cost of higher education is a significant issue. Olivia Locarno has saved money from her jobs at Chick-fil-A and Starbucks for her college expenses and dorm room necessities.

Although she is an 18-year-old resident of New Jersey, the individual still indulges in dining out with friends and purchasing new clothing occasionally. However, she stated that she has made an effort to control her discretionary spending due to the financial burden of starting classes at Marist College in the fall.

"Not spending money on things is difficult," she remarked.

Jogan, like others, is saving her coaching paychecks at Aquinas College in Michigan for future expenses, including a potential car purchase.

Jogan's experience leading the Mutants team has helped her develop soft skills such as communication and problem-solving, similar to what her older brother, Thomas, learned from his gig and applies in his supply chain management job.

Thomas stated that he wished he had been paid at the rate his sister was when he was her age. However, he noted that Dailey must allocate the additional income she is earning to account for inflation. Thomas emphasized that there is no sibling rivalry; rather, he is pleased to see his sister continuing a family legacy in a fulfilling profession.

"Thomas, 24, said, "She should be in a good spot. However, with things being more expensive now and so forth, there's a balance that needs to be considered.""