KEY WEST, FLORIDA — Dailey Jogan was thrilled to learn she would be making $15 an hour and receiving benefits as the head swim coach for a team in the Detroit metro area. Her older brother’s reaction was one of surprise.
At 18, Jogan spent the summer organizing meetings as the leader of a team of 250. He also enjoyed perks like free gym access and movie tickets offered by the park where they train.
That $15 hourly wage represents a 25 percent increase, or $3 an hour, over what his older brother was making in the same position five years ago. He also had to pay out of pocket to use the gym or go to the movies.
“I was pleasantly surprised,” Dailey Jogan said. “I feel very appreciated.”
Changes in the youth labor market
This shift in wages and benefits reflects new job opportunities for millions of American teens after the pandemic-induced job crisis. As other economic impacts of Covid have dissipated, young workers appear to be enjoying higher wages and additional benefits as the new norm.
Data from Gusto, a payroll platform that serves more than 300,000 businesses nationwide, shows the advancement of teens. The typical wage for a newly hired worker between the ages of 15 and 19 was $15.68 an hour in June, up more than 36% from the start of 2019.
That increase outpaces wage growth for all private workers, which increased less than 27 percent over the same period, according to federal data. Gusto’s statistics indicate that teens have been significantly protected from broader economic conditions that have sometimes led to lower wages for some adults.
Pushing the competition
In addition to salary, companies wanting to attract teens have added other benefits, such as gym access and movie tickets, to make their offers more attractive.
Fast-food chain Chipotle Mexican Grill has had a tuition reimbursement program for employees since before the pandemic. This year, the California-based company added a wellness offering that includes six free sessions with a counselor or mental health coach. Chipotle also launched a matching program, in which eligible employees who pay off student loans will receive up to 4% of their pay in their retirement accounts.
These additions to Chipotle’s benefits package were driven by surveys of its U.S. employees, more than a third of whom are teenagers. While these offerings may increase operating costs, global benefits chief Daniel Banks said they are worth it to ensure enough new hires are made and more stores are opened. They can also improve employee retention by keeping existing locations running smoothly.
Challenges for small businesses
Meanwhile, small businesses are struggling to keep up. Nearly half of Erin Powell’s employees at The Sugar Shack, a small business in Minnesota, are teenagers who work in roles like making coffee or baking pizzas. Powell accommodates holiday schedules, offers free menu items during shifts, and frequently raises her pay. She also hosts end-of-year parties and tries to foster a family atmosphere in the workplace.
Despite those efforts, she has occasionally seen teenage employees leave for higher pay at rival chains. Powell feels caught between a rock and a hard place: trying to do the right thing for her young workers while recognizing the financial realities of what she can offer without much scale.
“Everyone is still competing for workers,” Powell said. But he tries to show employees that “sometimes bigger doesn’t always mean better.”
The return of summer jobs
Whether it’s a pay raise or financial support for education, these benefits appear to be attracting teens into the workforce. It marks a turning point for a group that has seen significant declines on this front in recent decades.
At its peak this year, government data shows that about 40 percent of this age group is employed. That’s the highest percentage since 2009, but still far from the peaks seen in the late 1970s.
“Summer jobs are back,” said Alicia Sasser Modestino, an associate professor of economics who studies youth development at Northeastern University. “I remember being so wrong in the summer of 2021 when I said, ‘Teens, get out there, get these jobs, because this isn’t going to last.’”
Future perspectives
Gusto predicts that sports and recreation, education, and food and beverage will be popular for summer jobs among this age group. Teens have also begun to appear more frequently in less typical fields like construction and nonprofit work, as the workforce remains limited, according to Gusto’s Wilke. Going forward, he said, teens should continue to find these benefits and opportunities as long as the job market remains relatively hot.
A decreasing share of teen workers are earning the once-common minimum wage. Only about 3 percent of hourly workers ages 16 to 19 earned the federal minimum wage or less last year, according to government data. That’s down from nearly 20 percent in 2013. (The federal hourly minimum wage has remained at $7.25 since 2009, though several states have their own higher minimums.)
Because teenagers typically start at the bottom of a company’s pay scale, Wilke said it can be easier to institute pay increases that equate to large percentage changes compared to their higher-earning older colleagues. And companies may be more likely to give disproportionate pay increases to younger workers, he said, because they often don’t require other parts of the compensation package like insurance.
Balancing the budget
While today’s employed teens presumably have money to spend, there’s an elephant in the room: the rising cost of higher education. Olivia Locarno said she saves money from her jobs at Chick-fil-A and Starbucks in a savings account for books and dorm essentials.
The 18-year-old New Jersey resident still indulges in the occasional dinner with friends and new clothes. But she said she’s trying to resist discretionary spending because of the cost of starting classes at Marist College in the fall.
“It’s hard not to spend money on certain things,” he said.
Jogan is also saving his coaching checks for expenses while he’s at Aquinas College in Michigan, where he’ll be a member of the swim team. He’s also starting to think about big purchases like a car in the future.
For Jogan, leading the team called Mutants taught her soft skills like communication and problem solving. It’s similar to what her older brother, Thomas, said he learned on the job and uses today in his supply chain management job.
Thomas said he wished he was paid the same as his sister when she was her age. But he added that Dailey has to use the extra dollars she’s earning to offset inflation. Thomas said there’s no sibling jealousy, just happiness in seeing her continue a family legacy in meaningful work.
“It should be in a good location,” said Thomas, 24. “Obviously, things are more expensive now, so there’s a balance.”
