Teen Jobs Offer More Than Spare Cash, Expert Says
MICHEL MARTIN, HOST:
And now to matters of personal finance. As you may have heard, there has been some modest improvement in the job market lately. Some areas, or sectors, have started adding jobs after years of layoffs or inactivity. Now, that's great news for some adult workers who've been suffering from long-term unemployment, but the picture is still gloomy for teen workers.
Nationally, a quarter of teens between the ages of 16 and 19 who are looking for work cannot find it. That number is closer to 50 percent here in Washington, D.C., the nation's capital.
Our next guest says this is not just a matter of kids not being able to buy their own pizza on dates, that there are real consequences in these numbers. Our guest is Michael Saltsman. He's a research fellow with the Employment Policies Institute. That's a nonprofit research organization dedicated to studying public policy issues related to employment.
Welcome back. Thanks so much for joining us once again.
MICHAEL SALTSMAN: Sure thing. Thanks for having me.
MARTIN: So, briefly, when we spoke to you last year about this very topic - and since then, we've seen a slight increase in hiring, in general, but no improvement in hiring for teens. Why do you think that is?
SALTSMAN: One of the reasons is that teens have been - are still facing more competition for their jobs. I think if you look at the numbers over the last decade, teen employment in a lot of traditional teen sectors, like retail or sales, has actually fallen, while the number of people who are age 55 and older has risen in those sectors. And so we're just not seeing the types of opportunities for teens that maybe there were in the past.
MARTIN: I kind of want to go next to kind of the place that we were hinting at in the first part of our conversation, which is: Why should we care? I mean, a lot of people might think, well, so teenagers can't work. So what's the big deal? Maybe they don't need to go to the movies quite as often. You know, why should we care about this? What's your answer to that?
SALTSMAN: You know, I think we need to care because teens are picking up a lot more in those jobs than the paycheck. They're picking up a lot of skills that are going to help them get a better job later in life, and there's been some good compelling studies about this. There was one that looked at seniors in high school that held down a part time job 20 hours a week. Six to nine years after graduation, they were earning hourly wages that were 10 percent higher than people who hadn't held down that job, and they were more likely to be in a job that had health insurance and a pension. So I think there is sort of a financial benefit and a career benefit to getting those skills now.
The flip side is, is if you don't get those skills, you know, you're at a greater risk of being unemployed later down the line and at a greater risk of earning lower wages.
MARTIN: You know, some people might still say: What's wrong with not working as a teenager? I mean, I think many people know stories of kids who are really shouldering more responsibility than they, perhaps, should, or they feel that kids get intoxicated with earning a wage which isn't really that great, but that they get kind of intoxicated with the idea of being able to buy whatever they want or whatever they think they want, and perhaps detracting from their studies. So what's wrong with not working as a teen?
SALTSMAN: Well, I don't think there's anything necessarily wrong with not working, and you've actually seen a lot of teens who have left the labor force for that reason. They're going to summer school. You know, they're doing college prep work. Well, there's nothing wrong with working. If a teen does want to work and if they are looking for an opportunity, I think we should be providing that for them, because not everyone's going to have the opportunity to go to summer school. Not everyone's going to have the opportunity to do college prep. And so I think, as opposed to sitting on the couch for the summer, it's better for them to be out gaining some sort of experience.
MARTIN: You were also telling us earlier that some people may not recognize the degree to which teenagers often are contributing to the family economy, and that this isn't just about, you know, pizza and sneakers for a lot of kids. Could you talk a little bit more about that?
SALTSMAN: It's sort of difficult to assess how - there was a study from the Urban Institute a couple years back that actually kind of looked at low-income teens and actually found that teens from low-income households were actually less likely - not more likely - to be holding a job, which - they weren't really sure on exactly what the reason was. I guess the way I look at it is that...
MARTIN: Well, farm workers is a classic example of that.
SALTSMAN: Sure, sure. Absolutely. And I think, in those cases, you know, I think, especially if you look at some of the Western states, where there is a larger farm economy, actually, some of the teen unemployment rates in those states tend to be lower.
So, regardless of whether they're contributing to the family income or sort of picking up skills, I guess the point is is that teens can contribute at a young age, and I think we just want to make sure that they're getting an opportunity to do that.
MARTIN: I'm speaking with Michael Saltsman. He's a research fellow with the Employment Policies Institute. We're talking about the effect that joblessness has on teenagers and their employment lives later on. The rate of teen unemployment remains extremely high, 25 percent overall nationally and closer to 50 percent here in Washington, D.C., the nation's capital.
I want to go back to a subject that you brought up earlier, which is this whole question of what teens are paid when they do get a job. There have been sort of slow, but steady increases in the minimum wage over time, and people still argue about what that rate should be. But some argue that this kind of encourages employers not to hire teens. And I want to know, is that your perspective on this? And why do you think that might be?
SALTSMAN: It is my perspective. If you look at what economists who have studied this have said, you know, raising the minimum wage, it's not going to tank an economy. It's not going to, you know, crater a whole state. What it is going to do, though, is make it more expensive for employers to hire and train people, sort of, at the - on the bottom rungs of the career ladder.
And so if you're a restaurant or a grocery store and you're just maybe keeping a few cents in profit, when your labor costs go up like that, you sort of have two options. You can pass it along to your customers, or you can figure out how to sort of, essentially, do more with less. I think, especially in a recession, it's very difficult to go to your customers and say, well, I'm about to raise your prices 40 percent.
MARTIN: So the argument is that, if you have to pay somebody, what, $10 an hour, for that $10 an hour, if you can get an adult, you'd rather hire an adult. You're not going to "take a chance," quote, unquote, on a teenager. Is that the argument?
SALTSMAN: Yeah. You might hire an adult or, in some cases, you know, again, we can look at things like a grocery store or a retailer, you know, who have decided to maybe, instead of hiring someone to bag groceries, have - allow the customers to do it themselves, have done sort of self-checkout lanes.
You look at retailers who, instead of having as many people on the sales floor anymore, have sort of these automatic price checkers that let you do the job yourself. And so I think it's...
MARTIN: Let you do it. That's an interesting way to put it.
MARTIN: Some of us would put - make you do when you have two screaming kids. I'm sorry. I'm just going off on a tangent, here.
(SOUNDBITE OF LAUGHTER)
SALTSMAN: Well, it's finding a balance. I think it's finding a balance in doing it in such a way where the customer's not feeling inconvenienced. But sort of - the net effect is, whether you think those technological advances are a good thing or a bad thing, it just means that the team that used to fill that job doesn't have it anymore.
MARTIN: Well, before we let you go, what, in your view - and I understand I'm asking for your opinion, here - would make a dent in this extremely high, stubbornly high unemployment rate? You know, recognizing that every kid does not want to work, that's not the best experience for some teens, but as you've mentioned, that there are teens for whom it is vitally important. Is there something that you recommend or that your institute recommends that would make a dent in that?
SALTSMAN: President Obama, in January, actually proposed what he called the Summer Jobs+ program. It was trying to create summer opportunities for teens, some federal and some privately funded. And I think those efforts are good.
You know, the teen unemployment rate is going to improve as the economy improves. The question is: Can we get back down to sort of the lower percentages we enjoyed in the '90s? We've looked into this idea of creating a sort of a broader training wage that maybe could be paid to people age 19 and under. There's currently one on the federal level, but it's capped at a certain number of days.
And so I think relaxing something like that and allowing teens to just get in for a summer job and sort of work their way up on their own, I think makes a lot of sense if the value of this teen summer job really is in the experience that they're getting there.
MARTIN: Michael Saltsman is a research fellow at the Employment Policies Institute. He was kind enough to join us here in our Washington, D.C. studios.
Michael Saltsman, thanks so much for stopping by.
SALTSMAN: Sure thing.