Teens today are half as likely to have summer gigs compared to the 1970s.
A new Pew report finds that employment for 16 to 19-year-olds has been on a steady decline over the last couple of decades, with fewer than a third of teenagers working a summer job last year.
Between 1950 and 1990, employment of U.S. teens generally rose and fell with the economy. But ever since the recession in 1991, young people have had a harder and harder time getting jobs—even during periods of recovery.
Last summer, less than 32% of teens were employed between June and August, compared to 58% in 1978. The current rate is barely higher than the all-time low of about 30% in 2010 and 2011.
One reason for this steady drop in employment, the Pew report suggests, is a declining number of entry-level jobs, as well as an increase in pressure on young people to take unpaid internships rather than waitressing or lifeguarding gigs. Many of these problems aren’t limited to Americans, as younger workers across the world are facing much tougher labor markets than in years past.
Pew researchers also found that teen employment differed across racial groups. White teenagers in the U.S. were more likely to work summer jobs last year, with employment at 34% for white 16 to 19-year-olds—versus 19% for black teens, 23% for Asian teens, and 25% for Hispanic teens.
Interviewing for a new job over the phone? Donna Rosato, MONEY's Careerist, shares her tips for success.+ READ ARTICLE
The question at the center of several similar cases is likely worth billions
This week a ruling from the California Labor Commission was made public because popular ride-sourcing company Uber appealed it. A San Francisco-based driver named Barbara Ann Berwick brought a case alleging that she is an employee, not an independent contractor as Uber claims. It emerged that the commission ruled in her favor, saying the company owed her $4,152 in expenses. But this could lead to rulings worth much more.
Filed in March, the ruling is non-binding, has no legal bearing on any other drivers, and won’t force any money to change hands. But Uber’s decision to appeal will now move the fight to California’s court system where — along with several similar lawsuits pending in the state—it could set a binding precedent for a multi-billion-dollar question plaguing the booming on-demand economy: Do such companies have employer-employee relationships with tens of thousands of American workers?
That might sound like a mundane bureaucratic distinction, but it’s a concrete reality for the drivers, personal shoppers and lunch deliverers who enjoy the flexibility of setting their own hours but do not get standard employee benefits like overtime pay and worker’s compensation. In California, unlike most other states, employers are explicitly on the hook for reimbursing employees for all expenses necessary to do the job. And if the workers like Berwick win their cases, there are more than 15,000 other drivers in San Francisco alone who might want to be reimbursed too.
“Uber has essentially shifted to its workers all the costs of running a business, the costs of owning a car, maintaining a car, paying for gas,” says Shannon Liss-Riordan, a Boston-based attorney who has a class-action case pending against Uber in California federal court. “Uber has saved massive amounts …. It’s important that the labor laws be enforced so that the companies can’t take advantage of workers that way. Uber’s a $50-billion company and I think it can afford to bear the responsibilities of an employer.” She expects her trial will be underway by next year and will make arguments for class certification later this summer, saying this ruling “could be a lot of help.”
In a statement to TIME, an Uber spokeswoman said that its drivers embrace their status as independent contractors. “It’s important to remember that the number one reason drivers choose to use Uber is because they have complete flexibility and control,” she says. “The majority of them can and do choose to earn their living from multiple sources, including other ride sharing companies. We have appealed this ruling.”
Liss-Riordan has also filed a class-action case on behalf of workers for house-cleaning company Homejoy, as well as delivery service companies Postmates and Try Caviar, arguing that they have been misclassified as independent contractors when they should be treated like employees. Other cases are pending against ride-sourcing platform Lyft and grocery-delivery company Instacart. “Instacart does all it can to distance itself from the employer-employee relationship,” lawyer Bob Arns told TIME when that case was filed. “Why does a company want to do that? It’s to keep the bottom line lower, to unfairly compete against other companies. That’s the crux of our case.” Instacart did not respond to a request for comment for that story.
The growing independent-contractor workforce is a key reason that companies like Instacart and Uber have been able to grow so quickly, because the cost of organizing independent contractors is much less than hiring employees. There’s no requirement to pay unemployment tax or ensure that workers are making at least minimum wage. In many cases, the companies don’t have to pay for the smartphones or data plans workers use on the job. They don’t have to deal with the costly spools of red tape that come with federal and state withholdings and healthcare and anti-discrimination laws.
David Rosenfeld, a labor law expert and lecturer at the University of California, Berkeley, says a California superior court will likely set a trial date in a few months. If the judge agrees with driver Berwick, the rulings could be appealed back and forth all the way up to the California Supreme Court. That process could take years. But the California courts have been sympathetic to workers and Rosenfeld says its unlikely the state’s highest authority would overturn a ruling made in their favor. In the meantime, he says, lawyers like Liss-Riordan can “show the ruling around” as evidence that helps build their cases, if not a precedent to use in court.
“This is big, high stakes problem for them,” Rosenfeld says. While Uber emphasizes that the labor commission ruling is only about the status of a single driver, he notes that if Uber beats Berwick in court that doesn’t bar other drivers from bringing similar claims. Liss-Riordan says she has been contacted by more than 1,000 Uber drivers who believe they’ve been wronged. And her doors have been open to other “1099 economy” workers who want to file their own claims.
“A lot of companies are watching Uber and seeing whether it’s going to be allowed to get away with this,” she says. “These companies want to have it all. They want to have control over their workforce so they can provide this consistent quality service they sell to the public but at the same time deny it has any obligations to these workers that it is treating as their employees.”
How much control companies like Uber have over these workers will be central to the cases. Does their ability to kick drivers off the platform, their ability to set rates, their mandates to follow certain protocols amount to an employer-employee relationship? Uber has repeatedly argued that they are not a transportation company but merely a technology platform that helps willing drivers connect with passengers willing to pay for a ride.
But in denying a summary judgment in the class-action case earlier this year, District Judge Edward Chen wrote that Uber’s claim that it is not a “transportation company” is “fatally flawed.” In the March ruling, the labor commissioner wrote that Uber is “involved in every aspect of the operation.” A 2012 ruling from the labor commission, however, found that another Uber driver was, in fact, an independent contractor and describes Uber as a “technology company.” In the statement, Uber says similar commissions in five other states have come to the same conclusion.
These cases apply only to workers in California. So the endgame could look a few different ways if these on-demand companies lose their cases, all of which would require a change in business models. Operations could be shut down or take a different approach in California. Companies could start shouldering the costs of treating their armies of workers as legal employees. Or they could change the way they operate—giving up control over their workers and therefore control over the quality of their services—in order to keep treating them as independent contractors.
The latter, Rosenfeld says, is what FedEx recently decided to do after paying $228 million to settle claims from 2,000 pickup and delivery drivers in California who alleged that they were mislabeled as independent contractors. That high ticket price was directly related to California’s law requiring expense reimbursement. But making the decision to give up oversight is not an easy one. “You lose control of your brand,” he says. “And you lose control of your model.”
Be there in a productive way
It can’t be easy watching your beloved, talented, educated money pit child walk off that graduation stage, diploma in hand…and move back home with no job prospects. Last summer when I graduated with a couple of freelance jobs but looking for something full-time, I was lucky that my parents mostly employed the strategy they had been using with me since the fourth grade: “She’s got it.” They were always supportive but never pestered me about what progress I had made that day, where I was applying, who I had reached out to, because they knew I was on top it. And guess what? Their trust in me gave me much more confidence in my job search than constant nagging would have.
Any expert and anyone who has been there can tell you that self-esteem is the thing that takes the biggest hit during unemployment. Trust me, your kids are just as eager to find a job as you are for them to have one. They know you’ve just spent thousands of dollars on their education, and (I hope) they are endlessly grateful. They desperately want to have an answer to the question, “Where are you working?” Social media is there with unrelenting reminders of what isn’t true but certainly feels like it is: “EVERYONE HAS A JOB EXCEPT YOU, LOSER.” In short, they’re downright terrified. (For confirmation on that, just read this piece I wrote last year, “Fears of a New Graduate.”) From talking to many friends who have been through this difficult situation with their parents in the past year, here is some friendly advice for being there for your child in a productive way during the job search.
1. Don’t micromanage.
You know your kid, and maybe he or she is someone who needs an extra push to get things done. But either way, trying to micromanage your adult child’s career is ill-advised. I just read a truly horrifying anecdote in Aliza Licht’s new book Leave Your Mark about an insistent mother who called DKNY repeatedly seeking a job for her daughter. She literally sent an email with the subject line, “A job for my daughter.” While I doubt that most parents reach that degree of desperation (God I hope), it is an extreme illustration of the difficulty in watching your college graduate look for a job, and your natural desire to help in any way possible. Don’t go down that path. At this point, the kids are officially raised—you have to trust they’re equipped to find a job on their own.
2. Trust their unconventional choices.
I have written about nine successful millennials who did something after graduation other than start a full-time job. Your child’s career path might not look like you expected it to. In fact it almost certainly won’t, given the rapidly changing job market. One of my friends said one of the things he appreciated most about his parents was that they never questioned his unusual career choices, in particular one summer when he took an internship at Sesame Street. This may have seemed crazy at the time, but the internship turned out to be an eye-opening experience that motivated him to go to law school. The paths to success are many, and multiplying every day.
3. Be realistic in your expectations.
When that same friend found himself applying to law schools two years later, his dad insisted that he apply to all of the Ivy Leagues, despite my friend explaining that his GPA was below the threshold they even considered. Not very productive. This goes double for your sons and daughters seeking jobs right now. Sure, it’s getting better, but it’s tough out there. You can’t expect them to send applications one week, have an interview the next, and be sitting down at their new desk the week after that. Asking, “have you heard anything yet?” every day will only make them frustrated and demoralized. You also can’t expect them to be searching for a job eight hours a day–yes finding a job is a full-time job, but other goals or even social events can be equally essential.
4. Don’t throw their financial status in their faces.
I’m not in a position to tell anyone how to parent, but I am in a position to determine whether someone is being rude. If you agreed to let your child live in your house and they are obeying the terms of that agreement, it is unfair and wrong to throw that fact back in their face if they are clearly making an effort to find a job. Yes, they live in your house again and you’re allowed to impose whatever rules you see fit. You can make them do the dishes every day, shovel the driveway, hand wash your unmentionables, whatever. But using “well you’re living here for free!” as an angry or passive aggressive jab is not only cruel but insanely counter-productive. (Pro tip: Making someone feel like a loser is not conducive to that person rocking an interview and landing a job).
5. Don’t make comparisons to “when I graduated.”
“When I graduated I had four six-figure offers…” Stop right there. You’re different people, you have different paths in life. But even if your child is in the exact same profession as you, that comparison is flat out untenable. Most millennials graduated during the worst economic downturn since the Great Depression, and this year’s graduates are still feeling its effects. During our Great Recession, the unemployment rate for those over 34 peaked at about eight percent, but unemployment between the ages of 18 and 34 peaked at 14 percent in 2010 and remains elevated. According to Pew Research we are the first generation ever to have higher levels of student loan debt, poverty and unemployment, and lower levels of wealth and personal income than their two immediate predecessor generations had at the same age. We all know it’s not the same, so don’t make the mistake of acting like it is.
6. Support them, love them…
…in the same way you’ve been doing for the past 22 years. Thanks for that by the way. I hope that I speak for my generation when I say that we appreciate it more than you know.
More from Levo.com:
The nation’s unemployment inched up to 5.5%
The U.S. economy added a robust 280,000 jobs in May, and the unemployment rate rose to 5.5% from a near seven-year low of 5.4% in April, according to the latest employment situation report released by the Labor Department.
That number beat economists’ expectations of 225,000, and job gains came from a wide range of sectors, including professional and business services, leisure and hospitality, healthcare, and construction, to name a few.
The jobless rate rose because more people, such as new college graduates, entered the workforce, suggesting growing confidence in the jobs market.
Importantly, the report showed that wages increased by 8 cents per hour in May, and that wage growth has averaged 2.3% over the past year. While those gains aren’t extraordinary, they show that worker pay is increasing slightly faster than inflation, which should help bolster consumer spending and the overall economy going forward.
March’s job gains were revised up from 85,000 to 119,000, but job gains in April were revised down slightly. Overall, revisions of job gains for the previous two months means there 32,000 more U.S. jobs than previously thought. Over the past three months, job gains have averaged more than 200,000 per month, a key threshold that suggests that the weak GDP reading in first quarter of this year is a temporary blip rather than a harbinger of a broad economic slowdown.
A look at the monthly employment reports and what they mean.+ READ ARTICLE
The unemployment rate can often be used as a measure of how tough or easy it may be to get a job at a certain time. That one number, however, paints a picture that’s a little too simplistic. The unemployment rate fails to include people who have given up looking for work and those who consider themselves underemployed. To get a clearer picture, look at the employment growth number and the unemployment rate together.
They're just better at everything
Nerds are supposed to get their revenge after graduation.
Sure, high school jocks are popular. But as mothers across America tell their uncoordinated children: Study hard, get good grades, and you’ll have the last laugh by making more money later in life.
However soothing as this tale may be to athletically challenged youngsters, economists say it’s a lie. Former high school athletes “display significantly more leadership, self-confidence, and self-respect than those who were active outside of sports—such as being in the band or on the yearbook staff,” according to a recent study published in the Journal of Leadership & Organizational Studies (via The Atlantic).
Not only that, but former high school athletes retain these qualities as long as 60 years after they hung up their varsity jackets. The Atlantic also points to several other studies that former athletes earn “from 5 to 15 percent” more than non-athletes.
The jury is still out on whether this statistical difference is because the act of playing sports in high school teaches kids skills like hard work and determination, or because kids with those qualities gravitate towards sports in youth. Either way, it would appear that there are more reasons than fleeting glory to go out for the football team this fall.
Almost half of American workers don't have a full-time job
The Commerce Department’s announcement Friday that GDP growth was negative in the first quarter of this year, has analysts scratching their heads, searching for reasons the economic expansion, now in its sixth year, hasn’t yet reached escape velocity.
One explanation? The jobs recovery has been historically weak, both in terms of the pace of job growth and the quality of jobs that have been added.
A report released last week by the Government Accountability Office underscores this point. According to the GAO, a whopping 40.4% of U.S. workers are contingent as of the most recent available data in 2010 — meaning they work some in some other arrangement besides a standard full-time job.
Reads the report:
We found that compared to standard full-time workers, core contingent workers are more likely to be younger, Hispanic, have no high school degree, and have low family income. These contingent workers are also more likely than standard workers to experience job instability, and to be less satisfied with their benefits and employment arrangements than standard full-time workers. Because contingent work can be unstable, or may afford fewer worker protections depending on a worker’s particular employment arrangement, it tends to lead to lower earnings, fewer benefits, and a greater reliance on public assistance than standard work.
This rise of part-time, contract, and other sorts of non-permanent work arrangements has caused our current economic recovery to be dominated by consumers who are wary of spending — or simply aren’t being paid enough to power our consumer-driven economy.
This is why many economists, like Vice President Biden’s former Chief Economist Jared Bernstein, have stressed the importance of policies that would lead to full employment, like higher infrastructure spending, work-sharing programs during downturns, and loose monetary policy.
In an environment of full employment, competition for workers would require employers to offer higher pay and better conditions in order to retain their workforce. One of the few times the U.S. economy reached full employment was in the late 1990s, and it was also one of the few periods in past forty years where the median American worker saw significant and sustained growth in his or her wages.
there is a vast difference between asking for employees to exercise good judgment and hovering over their Tweets like Big Brother
People today live in a virtual online aquarium, and chances are good that one of the people watching you is probably your current or potential employer. According to job site CareerBuilder, 52% of companies now check job applicants’ social media profiles before hiring them, up from 43% just a year ago.
On one hand, it’s understandable. After all, it can be embarrassing for a business if one of its representatives posts offensive content or does something illegal via social media. Employers can even get into legal trouble for their workers’ actions. Advocates of the practice say that it’s necessary to protect companies’ reputations, confidential information, and is an inevitable byproduct of the Internet age, according to the Wall Street Journal.
But does monitoring of employees’ social media really protect a company or can it do more harm than good?
First, the argument that companies need to keep tabs online to ensure that their employees refrain from inappropriate or illegal behavior doesn’t really hold. While it’s conceivable that some low level silliness, such as posting a picture of yourself dancing on a table, could be prevented by employer monitoring, more serious infractions are unlikely to be shared on social media and therefore never appear on the radar of the company anyway.
In addition, when job candidates or employees know that they are being watched, they can restrict access to certain posts, set up dummy profiles to fool companies, or otherwise throw up smokescreens. This is particularly true of millennials, who are technologically adept at controlling and manipulating their online avatars. The point is, the limited preventative effect of social media monitoring may not be worth the time and expense required for companies to do it.
There is also the problem of bias. Americans today are arguably more socially and politically conscious than previous generations and actively use social media to convey their thoughts, debate important topics, and fight for causes. In some cases, employers may even be supportive, such as if a job candidate works tirelessly to raise money for breast cancer research, but in other cases, there is a real danger of people being penalized for their personal views on things like politics, race, or religion.
Even if a company itself is neutral, the subjective feelings of the person tasked with monitoring employees’ social media could easily lead to discrimination, especially in the highly polarized environment of the U.S. People should be able to share their views on gay marriage, for example, with their friends on social media, without running afoul of an employer who disagrees with them. Recognizing that in essence this is an inadvertent violation of laws that prohibit discrimination on the basis of race, political preference, gender etc, employers should at the very least factor this into their social media policies and put safeguards in place to prevent against it. The harm caused by bias to workers is immense but so are the potential legal consequences for companies.
Finally, by looking over workers’ shoulders, companies could stifle the most important trait that can benefit a business: creativity. As innovation becomes increasingly necessary in a hyper-competitive business landscape, this factor can be crucial for a company’s success.
Social media, for those who use it avidly at least, can be a medium to express our personality – for who we are – which is naturally linked to our creativity. Companies that foster creativity are more profitable and 50% more likely to be market leaders than their peers, according to the Harvard Business Review. Yet some businesses fail to make the connection between suppressing their employees’ online freedom and restricting their creativity.
There is no doubt that companies are within their rights to expect compliance with some common-sense social media etiquette. However, there is a vast difference between asking for employees to exercise good judgment and hovering over their Tweets like Big Brother. The latter can erode a necessary sense of trust between companies and their workers and undermine loyalty. Just as an employee or a job candidate needs to trust that a company has integrity and is worth working for, the company needs to show its people that it trusts them to behave like responsible adults.
By allowing workers to live their personal lives without intrusion, smart businesses can make a powerful statement; namely, that they accept them for who they are, treasure their professional contributions to the company, and want them to be happy and fulfilled outside as well as inside the office. This, in turn, would inspire loyalty and boost productivity in the workforce, and make those companies more profitable.
Kumar has worked in technology, media, and telecom investment banking. He has evaluated mergers and acquisitions in these sectors and provided strategic consulting to media companies and hedge funds.