Economist's View: Teens need foundation formed from entry-level, summer jobs
On June 10, the News Tribune published an article on its front page headlined, "Teen employment is falling, leaving a future workforce less prepared." Indeed, data from the Bureau of Labor Statistics shows that the employment-participation rate for 16- to 19-year-olds in Minnesota fell from 69.8 percent in 2000 to 52.3 percent in 2016, a decline of 17.5 percentage points. Over the same period, the participation rate for all workers over 16 fell by just 3.9 percentage points, from 75.1 percent to 71.2 percent.
We might expect the overall participation rate to be falling as our population ages: Older folks are less likely to be working. But the steep decline in the youth rate is a puzzle. What is causing it?
According to new research by economists David Neumark and Cortnie Shupe, rising minimum wages have been a major factor in reducing teenage employment. Workers at the beginning of their careers are less likely to have acquired the skills to be productive enough to earn high wages. And Neumark and Shupe's research also finds that minimum-wage hikes leave young workers less skilled later in their working lives.
We aren't talking about technical skills here as much as "soft skills." As Joe Mahon, regional economist with the Minneapolis Federal Reserve, explained in the News Tribune article, these are "things like the ability to resolve conflicts at work (and) knowing how to conduct yourself as a professional in the workplace."
Indeed, my first job at 16 was working in the kitchen of a pizza restaurant. I haven't proofed a base or topped a Super Supreme in nearly 20 years, but the basic skills that first job taught me were some of the most important: keeping to a schedule, managing money, etc. These skills are the foundation to which we subsequently add more involved, technical skills. But the job is that much harder without that foundation.
Strangely, perhaps, despite this low level of teenage employment, we often hear worries of a looming labor shortage in Minnesota. Employers, we are told, cannot find workers, and the most commonly touted solution is increased immigration.
But, as Erik White, regional labor analyst with the Minnesota Department of Employment and Economic Development, told the News Tribune, "There's no doubt many of the jobs in the economy are those lower-skill, entry-level jobs which would seem perfect for a young person to start their career."
Shouldn't we make use of the young, unutilized labor we have before bringing more people in to do unskilled work?
Improving Minnesota's poor recent record on youth employment — a nationwide phenomenon — would have real benefits. It would help alleviate the "labor shortage," and it would enable the workers of tomorrow to begin acquiring the skills they need.
John Phelan is an economist at the Center of the American Experiment (americanexperiment.org), based in Golden Valley, Minn.