Summer Youth Employment Outlook 2006

This article was published in the April 2006 South Dakota Labor Bulletin.

Within the next few weeks, high schools, technical institutes, colleges and universities across the state will be ending sessions for the year. What are the summer job opportunities for students this year? We looked at summer employment for youth 16 to 24-years-old and U.S. and South Dakota younger worker trends. To add a local perspective, we checked with South Dakota Career Center managers throughout the state about job opportunities on the summer horizon for youth workers.

U.S. Youth Labor Force

Nationally, the U.S. Bureau of Labor Statistics is responsible for tabulating labor force information, including data by age. Each month, they tabulate labor force information from the Current Population Survey (CPS). The CPS provides information on labor force, employment, unemployment and persons not in the labor force. In July 2005, the national labor force participation rate for the 16 to 24-years-old age group was 66.6 percent, which declined from the July 2004 (67.2 percent) rate. The participation rate is the number of individuals working or actively looking for work compared to the population level for the same age group. July is the month used by the Bureau of Labor Statistics to determine summer employment levels, because it is the peak summer month for employment. The 66.6 percent rate for 2005 represents the lowest July participation rate since 1965 and the tenth straight year of decline. 

The declining national participation rate can probably be explained by the increase in school enrollment during the summer, the increasing size of this age group and the softness of the labor market for the past few years. The proportion of 16 to 24-year-olds enrolled in school in July has grown over the past decade from 16.6 percent in 1995 to 27.8 percent in 2005.

Of the 24.4 million individuals in the labor force in July 2005, 21.7 million youth were actively employed, an increase of 302,000 from July 2004. Nationally, youth workers are concentrated in two industries; 22 percent of employed youth worked in the leisure and hospitality industry (including fast-food restaurants), and 20 percent worked in retail trade. Also, a significant number of youth worked in the education and health services, professional and business services, construction, manufacturing and government industries. However, education and health services, professional and business services and manufacturing all showed decreases in worker numbers in 2005.

U.S. Youth Workers by Industry

In addition to the employed youth, there are approximately 2.7 million youth unemployed, which means they are actively looking for work and available to take a job. This was a decrease of 330,000 from the previous year. The youth unemployment rate was 11.0 percent in 2005, down from 12.3 percent in July 2004.  

South Dakota Youth Worker Trends

Since the CPS does not provide labor force data for South Dakota youth 16 to 24-years-old, other sources of data have to be used. Using quarterly administrative data on workers covered by unemployment insurance, it is possible to estimate the number of youth workers taking summer jobs. Since the third quarter numbers represent the end of summer and the highest worker levels for the year, and the first quarter represents the lowest worker levels, the difference between the two should be a good indicator of summer jobs.

The following chart shows the last nine years of worker levels for youth 16 to 24-years-old. The last three years of the 1990s showed steady gains while the first two years of this decade showed substantial declines. The large gain in 2002 can be attributed to the economic downturn. There was a larger than normal decrease in the first quarter of 2002 along with a less dramatic decline in the third quarter. The increase in 2004 and 2005 can be attributed to the economy showing signs of recovery from past years, increased numbers of businesses with summer employment demand and more students working to supplement their education costs or to pay for high dollar purchases such as automobiles.

South Dakota Youth Worker Industry Distribution

Based on South Dakota Labor Market Information Center (LMIC) research, it appears the industry distribution of South Dakota youth workers is comparable to the national picture. Although South Dakota worker data by age groups is not available on a monthly basis, the LMIC staff were able to determine the age group and industry percentages using quarterly administrative data on workers covered by the South Dakota unemployment insurance program.

The following table shows the number and distribution of South Dakota wage and salaried workers 16 to 24-years-old by each industry for the third quarter of 2004 and third quarter 2005.

SD Youth Workers by Industry

To read about the local perspective on summer jobs from South Dakota Career Center Managers,
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If you have questions or need more information, contact Brian Bauer of the Labor Market Information Center at (605) 626-2314 or e-mail him at brian.bauer@state.sd.us.