These trends prompt an obvious question: what the heck happened to millennials?
Our first instinct, informed by endless tales of helicopter parents and padded college applications, was to look at what economists would call supply factors: why weren’t millennials willing to work?
Indeed’s AnnElizabeth Konkel, a creative and curious labor economist and honest millennial, immediately pointed to education as the cause. Millennials are setting new high-water marks for high school and college graduation, and it’s harder to work when you’re in school.
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Our analysis of the Department of Labor data confirms it. The proportion of 18-year-olds in school increased by about 13 percentage points during the turn of the millennium. But that doesn’t explain the entire drop in the employment rate of around 17 percentage points in this age group. Especially since many students are juggling school and work and the 18-year-olds of Generation Z were able to record a significant increase in employment without an associated significant drop in school education.
Part of the decline could be due to increased demand for after-school activities, according to Konkel and fellow economist Luke Pardue of payroll and benefits provider Gusto.
“Within this generation that I’m in, there was so much competition to sacrifice everything and have great extracurriculars and good grades and do whatever it takes in school to get into some kind of competitive college,” said Pardue.
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This argument is persuasive. But it’s a partial explanation at best, because Gen Z managed to keep working even as competition for select colleges escalated.
So we called Tim Wolfe, dean of admissions at William & Mary in Virginia. He said he is skeptical of claims that college admissions decisions are behind massive societal changes. Only a small minority of teenagers apply to the kind of elite institutions that expect you to be a squash team captain and published author by the age of 17. And even at elite schools, Wolfe said, work experience can be just as important to an application as any other activity.
“I wouldn’t believe college applications are a driving factor in teen employment trends,” Wolfe told us.
Part of the explanation was teenage schedules cluttered with mock parliaments and badminton practices, but something else had changed between Millennials and Gen Z. To find out what was going on, we called some zoomers. This column isn’t called the anecdotal section, but when the data doesn’t make sense, it’s best to talk directly to the people behind the numbers.
Malachi Allen, 17, from Dallas, who kept calling us “sir,” recently accepted a job at Smoothie King after conducting a six-minute interview in which he negotiated over $1.50 an hour. Everyone seemed to take it for granted that teenagers with little work experience would jump at a job offer, no matter what generation they were from.
We asked for clarification: was he saying that teenagers in 2008 would have been just as eager to work as he was in 2022? And the only difference is that he got a job offer and she didn’t?
“Yes sir,” Allen said. “Also the fact that we’re getting paid more too, either because the jobs are more desperate and trying to make us more money, or just because of inflation.”
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About 40 minutes north of Allen, in the suburb of Allen, Tex. (no relative), Jason Cabrera, 20, knows the youthful workforce inside out. “Insider” because he was a teenage worker himself until his last birthday. And “out” because he’s been general manager at Layne’s Chicken Fingers since he was 19, hiring and managing a mostly youthful workforce, first at a shop in Allen and now in nearby Lewisville.
Cabrera used to see dozens of applications each week and could choose from industry veterans. These days he’s lucky if he sees a single application. This labor shortage makes companies like Layne’s much more willing to face the difficulties associated with hiring modern teenagers, who spend nine months of the year juggling school, sports and leisure activities.
But “once summer comes around,” Cabrera said, “most of these kids just want to work, and that’s all they want to do.”
The Zoomers agreed: it wasn’t the teenagers who were changing, it was corporations. So we called again.
Lyn James owns Flowers & Cappuccino by Lasting Visions, a bright spot for floral arrangements and fancy coffees in Bowman, a rural center of 1,470 people on North Dakota’s rolling western plains. (She is also Bowman’s mayor.)
In the past, James said, she has struggled to find youth workers. It’s impossible to build a regular schedule around their myriad commitments at school, in the community, and in their homes and ranches.
But with a shortage of workers, hiring teenagers became a necessity. So James embraced flexibility: she began creating schedules that accommodated teenage activities, hiring a mix of young people involved in different sports and clubs who didn’t all have to have time off at the same time.
“We still have a good reach and staffing, and yet the kids can still be kids,” James said.
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Other companies told a similar story. Around the time Zoomers returned to the workforce, competition for labor was intensifying, and people who mastered hiring teenagers had a significant advantage.
For example, when Chad Simmons and his wife Carol founded Sugapeach a decade ago, serving soul food — fried fish, fried chicken, and sides — in the fast-growing Iowa City suburb of North Liberty, they didn’t need teenagers. “It was easy to find people with experience at the price we were paying at the time,” Simmons said. “We could always pay around minimum wage and still find people.”
But as the economy improved, older workers were drawn to higher-paying jobs at manufacturers and distributors. So Simmons got creative. Drawing on skills honed in his earlier career as a human resource professional, he started Scholars Making Dollars, a program to educate and mentor high school freshmen. The high school graduates in this program have matured into a pillar of his business model in just a few years.
“We started to build in a developmental component to make sure they could all do well in high school and then go to college,” Simmons said.
Payroll data from more than 200,000 companies using Gusto shows a similar trend nationwide. As of April 2019, teenagers accounted for about 2 percent of new hires on their platform, Gusto’s Pardue said. By April of this year, the teenage share of new hires had more than quadrupled to 9 percent. Wages increased faster for teenagers than for any other age group.
“What we’re really seeing across all industries is teenagers filling that gap as older workers exit the workforce or are either still unable or unwilling to come back,” Pardue said.
So if school and extracurricular activities don’t really keep teenagers from working – as long as companies are willing to hire them – maybe this isn’t a supply problem at all. Perhaps the infamous, generation-defining millennial exit from the youth workforce was always about demand.
When the demand for labor changes, teenagers feel it first. They are more exposed to the cruelties of the economic cycle than any other group. And millennials have been worse off economically than any generation in history.
Millennials entered the labor market amid two major recessions and the jobless recovery that followed, meaning they were always competing against legions of laid-off, more experienced workers, said Northeastern University economist Alicia Sasser Modestino.
Millennial teens also faced stiff competition from another vast reservoir of talented, hard-working adult competitors, said Hande Inanc, a senior Mathematica researcher who tracks trends in youth unemployment. The immigrant population has increased sharply over the millennia, with the foreign-born proportion of the population reaching its highest level since at least 1850 in 2018. It has since declined, in part due to Trump-era immigration policies and restrictions related to the coronavirus pandemic.
Meanwhile, many of the entry-level jobs that drew Gen X into the workforce began disappearing as millennials entered the workforce, Modestino said. Low-wage teenagers in video rental stores have been replaced by a few high-paid adult programmers at some video-streaming giants. Paper carriers were similarly phased out in favor of highly skilled adults making newspapers available online, delivered via internet protocols rather than bicycles.
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