Summer Youth Employment Outlook 2007

This article was published in the April 2007 South Dakota e-Labor Bulletin.

With spring in the air, the thoughts of some again turn to summer employment opportunities for youth. Young South Dakotans are thinking about what they can do to earn some money and gain some work experience this summer. Employers explore the youth labor pool, looking for summer help with the skills and temperament to fit their needs. As we have in past years, the South Dakota Department of Labor again will focus on summer employment for youth ages 16-24. Because of the seasonally timeless popularity of this subject, we have again analyzed the labor market for this summer’s working youth in both the United States and South Dakota. It will also include a local perspective on summer youth job opportunities from Career Center managers throughout the state. Because many youth are asking what they could possibly do to earn money this summer, we have also included a synopsis of the YouthRules Initiative. YouthRules promotes positive and safe work experiences for young workers by educating parents, teens, employers and educators about the types of jobs teens can hold and the number of hours they can work.

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 2006, the national labor force participation rate for the 16 to 24 year-old-age group was 66.7 percent, which increased from the July 2005 rate (66.6 percent). The participation rate is the number of individuals working or actively looking for work compared to the population level for the same age group. The participation rate peaked in 1989 at 77.5 percent. 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. Although slight, the 0.1 point rise in the youth participation rate in 2006 is good news, since it represents the first increase in the participation rate in the last 11 years.

The declining national participation rate in the previous 11 years can probably be explained by the increase in school enrollment in July, indicating youth enrolled in school are much less likely to be in the labor force. Other key factors include the increasing size of this age group, the softness of the labor market for the past few years and the restrictions applied to anyone under 18 years of age in jobs considered hazardous by the Secretary of Labor.

Of the 24.7 million individuals in the labor force, 21.9 million youth were actively employed in July 2006, an increase of 200,000 from July 2005. Nationally, young workers are concentrated in two industries; 22 percent of employed youth worked in the leisure and hospitality industry (including fast-food restaurants) and 21 percent (an increase of 1 percent from 2005) 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, government, financial activities, information, transportation & utilities, wholesale and retail trade, professional and business services and manufacturing all showed decreases in worker numbers in 2006.

U.S. Youth Workers by Industry

In addition to the employed youth, there are approximately 2.8 million youth unemployed, which means they are actively looking for work and available to take a job. This was an increase of 100,000 from the previous year. The youth unemployment rate was 11.2 percent in 2006, up from 11.0 percent in July 2005.

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 younger 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 an accurate indicator of summer jobs.
The following table shows the last ten years of worker levels for youth age 16-24 years. The last three years of the 1990s showed steady gains, while the first two years of the new 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 increases in 2004 and 2005 can be attributed to the economy showing signs of recovery from past years, an increased number 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. The small increase in 2006 might be an indication that the economy is in a more stable situation than prior years.

South Dakota Youth Worker Industry Distribution

Based on Labor Market Information Center (LMIC) research, it appears the industry distribution of South Dakota’s young 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 was 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 chart shows the number and distribution of South Dakota wage and salaried workers age 16-24 years by each industry for the third quarter of 2005 and third quarter 2006.

SD Youth Workers by Industry

To read about the local perspective on summer jobs from South Dakota Career Center Managers,
Click here!

Click here for information on youth labor laws--what types of work different age groups can legally perform, what hours they can work, etc. 

Click here to read about some of the advantages to youth of having summer employment experience.

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.