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Slowdown Puts Brakes on Teenage Jobs and Pay
Subject Comparative statics
Topic Labor markets
Key Words Slowdown, job search teenage unemployment, unemployment rates, part-time jobs, hours, pay, perks, conditions
News Story

The economic slowdown is hurting teenagers as well as seasoned workers. Teens typically look for summer jobs. Last year, they were greeted with signing bonuses, extra pay and perks. This year, in contrast, they are finding they must start their job search earlier, apply for more jobs, and consider self-employment options, such as babysitting. Teenage unemployment rates are expected to be 15 percent this year, up from 13 percent last year.

The situation is being exacerbated by the slowdown resulting in less hiring of graduating college students. Those who cannot find work look for part-time jobs that teens might otherwise have obtained.

Employers find that they have many more applications than usual and can be choosier. Where teens can find a job, the hours may be less than desired, the pay and perks may be less, and conditions may be worse, perhaps requiring working at unsocial hours.

(Updated September 1, 2001)

Questions
1. Draw a supply and demand diagram showing the labor market for workers in jobs typically held by teenagers. Mark the wage level such that there is unemployment.
a) Show the effect of the economic slowdown on the employment level assuming the wage level does not change. Explain what you have drawn. What happens to the amount of teenage unemployment?
b) Now show the effect of college graduates applying for these typically teenage jobs. Explain why you moved the curve you did. What are the implications for teenage unemployment at the existing wage?
2. The news story highlights a number of changes in the labor market. Explain the following, referring to your diagram in Question 1.
a) Teenagers are applying for more jobs.
b) Employers are often paying less than before.
c) Teenagers are often employed in jobs that require fewer hours of work.
d) Babysitting is a growing employment alternative for teens.
Source Stephanie Armour, "Teens find job search tougher this summer," USA Today, June 22, 2001.

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