Dailey Jogan was thrilled to discover that she would be earning $15 per hour along with a variety of benefits as the head swim coach for a metro Detroit team. Her older brother’s response seemed more like astonishment.
At just 18 years old, Jogan had spent the summer coordinating meets as the staff leader of the 250-person team. She also received perks such as free access to the gym and complimentary movie tickets, thanks to the facilities located within the park where they practiced.
The $15 hourly wage was approximately 25% higher than what her older brother earned in the same position five years ago. Unlike him, she did not have to pay for using the workout equipment or watching a movie.
“I was very pleasantly surprised,” Dailey Jogan remarked. “I feel very valued.”
This increase in pay and benefits highlights the evolving job landscape for millions of American teenage workers post the pandemic-induced labor shortage. While other economic impacts of Covid have faded, the trend of higher wages and added incentives for young employees seems to be the new norm.
Data from Gusto, a payroll platform serving over 300,000 businesses nationwide, illustrates the significant progress made by teens. The average wage for newly hired workers aged 15 to 19 was $15.68 per hour in June, a surge of over 36% since the beginning of 2019.
This growth outpaces the overall wage increase for all private payroll workers, which rose by just under 27% during the same period, according to federal data. Additionally, teens have been somewhat shielded from fluctuations in the broader economy that have sometimes led to reduced pay for certain adults.
Liz Wilke, Gusto’s principal economist, noted, “It’s a much better time to be a teen entering the labor force today than it was five or 10 years ago.”
Apart from pay, businesses targeting teens have introduced extra benefits, like the gym and theater access provided to Jogan.
For instance, at Chipotle Mexican Grill, workers have been eligible for a tuition reimbursement program predating the pandemic. The company recently added a well-being program offering six free sessions with a licensed counselor or mental health coach. Chipotle also initiated a match program where eligible employees receive up to 4% of their pay from the company in their retirement account for making student loan payments.
These enhancements to Chipotle’s benefits package were based on feedback from its U.S. restaurant workers, over a third of whom are teens. While these additions may raise operating costs, head of global benefits Daniel Banks believes they are essential for recruiting new hires and expanding operations, as well as improving worker retention.
In contrast, small businesses are striving to keep pace. Nearly half of Erin Powell’s employees at The Sugar Shack, a small business in Minnesota, are teens handling tasks like coffee-making and pizza-baking. Powell accommodates their vacation schedules, offers free menu items during shifts, provides frequent raises, hosts holiday parties, and fosters a familial workplace environment.
Despite her efforts, Powell has observed some teen employees leaving for higher-paying positions at chain competitors like Starbucks. She faces the challenge of balancing the welfare of her young workers with the financial constraints of a small business.
To manage rising labor costs, Powell takes on managerial responsibilities herself and minimizes wastage within the business to reduce unnecessary expenses.
These incentives, whether in the form of higher wages or educational support, are attracting teens to the workforce, marking a shift for a demographic that experienced declines in employment opportunities in recent decades.
According to government data, close to 40% of teens were employed at the peak this year, the highest percentage since 2009 but still below the highs of the late 1970s.
Alicia Sasser Modestino, an economics professor at Northeastern University, remarked, “The summer job is back.” She noted that Gusto anticipates popular summer job sectors for teens to include sports and recreation, education, and food and beverage.
Teens are also venturing into less traditional sectors like construction and nonprofit work due to the tight labor market, as per Gusto’s Wilke. Looking ahead, she believes teens will continue to find such opportunities and benefits as long as the job market remains robust.
The proportion of teen workers earning minimum wage has decreased significantly, with only about 3% of hourly workers aged 16 to 19 earning at or below the federal minimum wage last year, down from nearly 20% in 2013.
Wilke explained that it is easier to implement substantial percentage wage increases for younger workers who typically start at the lower end of a company’s pay scale. Businesses may be more inclined to provide significant wage hikes to younger employees as they often do not require additional compensation components like insurance.
While employed teens today have more disposable income, the rising costs of higher education pose a challenge. Olivia Locarno, who has worked at Chick-fil-A and Starbucks, saves money for college expenses but also indulges in occasional meals out and new clothes. She tries to limit discretionary spending due to the upcoming costs of attending Marist College.
Similarly, Jogan saves her coaching earnings for expenses at Aquinas College in Michigan, where she will be part of the swim team. She is also considering future big-ticket purchases like a car.
Leading the Mutants team has equipped Jogan with valuable soft skills like communication and problem-solving, similar to what her brother, Thomas, learned from his previous role and applies in his current supply chain management job.
Thomas expressed that he would have appreciated earning the same rate as his sister did at her age. He acknowledged that Dailey needs to manage the extra income considering inflation but emphasized that there is no sibling rivalry; he is pleased to see her continuing the family legacy in a meaningful job.
Thomas, aged 24, remarked, “She should be in a good spot. Obviously, things are more expensive now and so forth, so there’s a balance.”
