Where Have All the Young Workers Gone?

Young workers in Utah and the U.S. comprise a smaller share of the labor force

By Lecia Parks Langston, Senior Economist

 

"We should be trying to reach the young workers because that’s when you’re most idealistic and have least fear."  John Lennon

 

One of the most striking labor market changes of the last decade and a half is the declining participation of teenagers in the labor force. Nationally, teenage participation topped out at almost 59 percent in the late 1970s, and today stands at roughly 36 percent. While the trend isn’t as pronounced in Utah as it is nationwide; here, too, young people are less likely to be employed or looking for work than they were as the century began. The reasons for this phenomena are not clear. However, more after-school activities and increased borrowing to pay for post-secondary education (rather than earning while learning) may factor into this decline.

 

On the other hand, some characteristics of youth workers have changed little. Utah teens still show some of the highest labor force participation rates in the nation. Also, young people continue to show the highest unemployment rates, the lowest wages and the top turnover rates of any age group.

 

Data Sources

Three different data sources from the U.S. Census Bureau aid in understanding the trends and characteristics of the youth labor force. Each provides its own strong points in the overall discussion.

Current Population Survey (CPS)

• Source of the national unemployment rate.
• Questions are designed to accurately meet labor force definitions.
• Large number of labor-related questions.
• Small sample size for Utah. Only annual data meets statistical standards for publication. Monthly estimates are modeled.
• Limited state information available. No Utah substate information is available.

 American Community Survey (ACS)

• Provides demographic data for the nation, states, counties and cities/towns.
• Much larger sample size than CPS.
• Five-year averages available for all counties.
• Not as many labor-force related questions.
• Wide margins of error for smaller counties.

 

Local Employment Dynamics (LED)

 

• Combines administrative jobs and wage data with information from ACS and other sources.
• Detailed geographies available.
• Limited demographic information.
• Age groupings don’t match ACS or CPS.

 

What does the data from each source reveal about younger workers?

 

Current Population Survey

•  Nationally, the civilian population between the ages of 16 and 19 years old has remained relatively steady between 2007 and 2017, declining by little more than 1 percent. However, the number of this age group’s labor force participants dropped almost 16 percent over the same time period.
• In the U.S., the share of 16- to 19-year-olds in the over-16-years population dropped from roughly 9 percent in 2007 to 8.1 percent in 2017. Their share of the labor force declined from 4.8 percent to 3.9 percent.
• Between 2007 and 2017, workers over age 45 greatly increased their share of the labor force reflecting the demographics of the baby-boom generation.
• The U.S. labor force participation rate (percent of population in the labor market) of 16- to 19-year-olds declined significantly from 47 percent in 2002 to 35 percent in 2017.
• In Utah, the 16- to 19-year-old population actually increased 15 percent between 2007 and 2017. After a dip during the “great recession” the number of young people in the labor force also increased. The labor force gain between 2007 and 2017 measured, again, 15 percent. .
• However, in relatively fast-growing Utah, the share that 16- to 19-year-olds comprised of the over-16-years population increased only slightly from 9.1 percent on 2007 to 10.1 percent in 2017. The share of the labor force maintained by 16- to 19-year-olds remained virtually unchanged, increasing only 0.1 percentage points over the decade. .
• In Utah, the participation rate for this age group dropped dramatically from 55 percent in 2007 to 42 percent in 2011. Since that point, it has returned to 55 percent. However, participation was 6 points higher back in 2002. .
• Unemployment rates for 16- to 19-year-olds are the highest of any age group, both in Utah and the U.S. However, Utah’s youth unemployment rate typically runs 3 to 4 points lower than the national average (Utah’s overall jobless rate also runs lower). In 2017, the U.S. youth unemployment rate measured 14 percent compared to only 3 percent for workers 45- to .
• Utah shows one of the highest youth labor force participation rates in the nation. In 2017, Utah’s 16- to 19-year-old participation rate measured 55 percent compared to 35 percent nationally. Of the states with available rates, only Wisconsin ranks higher. A strong work ethic coupled with large families with greater financial needs may account for the high labor force participation rates among Utah teens. Even in the more youthful West, Utah’s high youth participation rates stand out. .
• Other age groups’ participation rates have held relatively steady, with the exception of 55- to 64-year-olds who shown an increased rate of labor force participation.

American Community Survey

 
• American Community Survey data for all counties is only available in five-year averages. Roughly half of all Utah counties showed a decline in the 16- to 19-year-old population between 2005-2009 and 2013-2017, while roughly half gained population in that age group.
• Among metropolitan counties, Salt Lake, Washington, Davis and Weber all experienced an increase in the 16- to 19-year-old population. In contrast, both Cache and Utah counties showed a decline in the 16- to 19-year-old population.
• However, both Cache and Utah counties show relatively high shares of over-16-year population in the teenage group (10 and 11 percent respectively). The other metro counties showed lower-than-average 16-to-19 population shares, with Salt Lake County registering at only 7 percent. Many of the mid-sized counties (for population) showed a decline in 16- to 19-year-olds between 2005-2009 and 2013-2017.
• In contrast, only six counties showed an increase in the 16- to 19-year-old labor force. Just two metro counties, Washington and Davis, experienced an increase in the teenage labor force. 
• Counties with dominant university/college populations, including Sanpete, Iron, Utah and Cache, generally displayed high shares of 16- to 19-year-old workers. On the other hand, Weber and Salt Lake counties showed relatively low shares of 16- to 19-year-old labor force participants.
• Matching national and state trends, between 2005-2009 and 2013-2017, all but five counties showed a decline in the teenage labor force participation rate (percent of age group population in the labor force).
• Both the highest and lowest teenage participation rates tend to appear in non-metro counties. In general, metropolitan counties participation rates rank near the middle of the pack.
• As elsewhere, unemployment rates for teenagers are higher than other age groups. (Please note that unemployment rates for less-populated counties reflect very wide margins of error.)

 Local Employment Dynamics

 

• In Utah, the number of jobs held by 14- to 18-year-olds surged during the mid-2000s boom, crashed during the recession, and has slowly worked at regaining ground. However, by the end of 2017, young people still held fewer jobs than they did in 2007. Moreover, the number of jobs held by this age group has dropped 14 percent since 2000.
• The share of jobs held by 14- to 18-year-olds has declined from more than 6 percent in 2000 to just 4 percent in 2017.
• In contrast, the share of jobs held by “seniors” (65 years and older) has increased from 2 percent in 2000 to 5 percent in 2017. Part of this gain has resulted not only from seniors working longer, but because the large baby boom generation has begun reaching retirement age.
• Not surprisingly, 14- to 18-year-olds, with their lack of schooling, job skills and typically part-time status, make, by far, the lowest average wage of any age group.
• Also, in line with expectations, 14- to 18-year-olds are most likely to work in accommodations/food services (36 percent) and retail trade (19 percent). Compare these high rates with those for all workers: 8 percent work in accommodations/food services and 12 percent in retail trade.
• Nevertheless, in Utah, 14- to 18-year-old workers can be found in every major industry. Young males are more likely than young females to work in construction, particularly when that industry is booming.
• The gender wage gap exists for both young and older workers. However, the gap is smaller for young people. For example, in 2017, the difference between the average wage of 14- to 18-year-old male and female workers was only about $115 dollars, while for all workers, the difference was closer to $2,200.
• As any parent of teenagers might anticipate, 14- to 18-year-olds display the highest turnover rates of any age group. The vast quantity of jobs in occupations that typically employ young people, school schedules, and the bank of mom and dad probably factor into to this elevated level of turnover.
• Young males show slightly higher turnover rates than young females.