Teenagers used to be the chosen hires for mom-and-pop businesses looking for affordable, often seasonal help. But the Great Recession changed all that.
A new report from the Brookings Institution looks at the labor market struggles of teens (ages 16 – 19) and young adults (ages 20 to 24). In 2000, 55 percent of teens had paid employment sometime during the year, the report says. By 2011, it was only 28 percent—the highest unemployment rate for teens in the post-World War II era.
The report suggests that the recession created a pool of overqualified older adults willing to work jobs previously held by teens leading employers to choose older workers over younger ones.
It warns, however, that there are potential societal consequences to the large spike in teen unemployment. For one, teenagers who work may acquire skills and connections that become valuable later in life.
“In addition to financial benefits, employment can provide young people the chance to acquire specific occupational skills and broader employment skills such as communication, teamwork and problem-solving,” the report says, adding: “Reduced work experience among high school and college students is worrisome not because it automatically indicates current economic hardship, but because it suggests a long-term negative effect on employment and earnings.”
For small-business owners, there can also be several benefits to hiring teenaged workers, including:
1. Lower pay, fewer benefits. Since most teens work part-time—and it may be their first job—they may be satisfied with minimum-wage employment that offers them flexible scheduling and the opportunity to learn some skills. The federal government and some states already allow employers to pay teens a lower minimum wage, at least for a certain time period. Teens also often don't need the employee benefits that older workers expect.
2. Fresh perspective. Many businesses can benefit by hiring Gen Z (“the Internet generation”) employees, who look at the world with a very different perspective than older generations.
3. Tax credits. Some states offer employers tax credits for hiring young workers. New York, for example, recently expanded eligibility for its tax credit for hiring workers aged 16 to 24. There are also special tax breaks for business owners who employ their own teenaged kids.
4. Ability to make an impression. Younger workers may be less set in their ways than older workers with more work experience, giving employers greater ability to train and groom them and instill work ethic.
Keep in mind that there are also many federal and state rules about hiring workers under age 18. It’s important to know your state’s rules before hiring a teenager at your business.
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