Transcription
Back in the year I was born, in 1975, if you were a teenager in the summer, you probably had a job. You were mowing lawns. You were working in a pool like this one behind me here in San Antonio, Texas. You were working at Woolworths or even at the local amusement park. Back then, 72% of teenagers would have a summer job. Today, the numbers barely half that, with less than 35%. In just a few decades, we've lost over half of America's working teenagers. Teenagers aren't getting jobs anymore during the summers, and nobody's talking about why.
Those jobs didn't disappear overnight. It happened gradually. And it's also not why you think. Not that teenagers are lazy or stuck on phones all the time. It's much more complex than that. It's something else that happened. It's the way we think about America. It's the way we think about jobs. It's the aging of America. And it's a lot of machines involved. This story is the rise and fall of teenage jobs. Oh, and if you stick around to the end of this video, I'll tell you why I picked this closed-up pool here in San Antonio, Texas, as a place in the middle of winter to do this video. The answer, well, it'll surprise you.
Let's go back to when summer jobs were nearly at their peak. It was in 1978. That summer, 72% of teenagers had a summer job. You remember back then, the baby boom was at its peak. 10% of the labor force at that moment was age 16 to 19. Pretty insane. Entry-level jobs were everywhere. You could be working at McDonald's, at a pool, inside of any part of the booming economy. If you were relatively skilled and could talk and interact with another person, you had a job pretty much instantaneously. They needed you. And culturally, that's just what baby boomers did when they were teenagers. They got their first job. That's what the whole generation was about, working hard and playing hard. But at that moment would begin a 45-year decline in teenage employment.
Over the next couple decades, from the 1980s to the 2000s, the era when I was a teenager, believe it or not, there began a steady erosion of teenage unemployment. We went from 58% in 1980 to 52% by 2000. The reason, well, it was education. This was the beginning of the college industrial complex in America. Basically, the American dream had a part, which was that part was you had to go to college in order to get ahead. And the statistics agreed with it at the time. College earners were vastly out-earning people with just a high school degree. So parents, they told their kids, you know, you need to get ready to get into the best college you can because that'll determine your future. So kids, instead of doing things like summer jobs, were going to enrichment programs and things that would help them get into the best school they could. Mom and dad knew that a McDonald's cashier check wasn't going to get you into Harvard. You needed to have something special on your resume. So that's what parents started telling their kids. But you'd expect that moment that kids would go to these enrichment programs, summer camps, or whatever, and then come back and get a job. But they didn't.
Then the next thing to happen helped solve some of the mystery. In the 2001 like recession, post the dot boom. Teenage employment went down. That's pretty normal. But something happened. After the 2001 recession, teens didn't come back to summer jobs. And then during the next recession in 2008, they didn't come back again. This was quite the mystery. So a Federal Reserve economist named Christopher Smith, he went and dug in. Why is this phenomenon going on? And the answer he found was pretty surprising.
The first thing that Smith and other economists discovered was that if you go into a lot of workplaces these days and look who's behind the counter taking a lot of those jobs that were once, you know, filled by teenagers and after school hours, it's suddenly people that don't look like teenagers. In fact, the opposite of teenagers. In 1987, only 11% of workers were over 65. Today, that number is 19%. That's 11 million more senior citizens who are out there taking up jobs, many of which are ones that teenagers used to take. Here's something that employers figured out. That 60-year-old retiree, they take their job really seriously. They don't check their phone, they don't talk back, and they show up on time all the time. They don't have any of those annoying school activities or parenting or dates or proms to keep them from coming into the job. So, if you're an employer, who you going to choose? Yeah, the silver sneaker older person into the role. So, the first group to actually start to push teens out of the workforce were some of the people that should have most wanted them to have jobs, their grandparents.
But that wasn't the whole story. The early 2000s also began and continued a large influx of migrants into the United States. And what we've seen here is the immigrant labor participation as a total percent of the labor force has gone from 15% in the early 2000s to over 17%. And it's growing. But here's something that surprised everybody. When Smith dug in, he discovered that immigrant labor participation hit teenagers worse than it hit adults. Whereas a 10% increase in immigrant labor might hit adults by 1% in terms of total labor participation, for teenagers, it hit them three or three and a half%. All those jobs that teenagers used to do, like food prep, cashiers, valet parking, suddenly it was immigrants coming in, taking those jobs and taking them year-round, not just during the summer.
And here's something else. The laws in the United States basically encourage employers not to hire teenagers. A big cost for employers is insurance. And one of those is called workers' compensation. Turns out if you hire a teenager, it costs you more because why? Teenagers are much more likely to get injured on the job. They're basically kids. [laughter] So, so that happens. Uh, there's also other constraints. They can only work certain hours. My kids, who are teenagers, by the way, have gone out trying to get jobs here in San Antonio. And the moment they walk in, the employers look at them and say, "Well, you can only work after school." Like, that's not going to work for me. I need somebody here at 6:00 a.m. so they don't get the jobs.
But the 2010s saw another increase in stuff because of increased labor costs across the board. That meant that more and more companies are putting things like self-checkout lines. Teenagers used to be a stalwart in the checkout lines of grocery stores. Today, those grocery stores and cashiers are getting replaced by self-checkout lines. Retail used to be the biggest employer of teen labor. Now it's getting phased out. Some statistics show that 88% of cashier jobs are going to get automated out and disappeared. Heck, there's even folks who are using Philippine or overseas labor to basically zoom in to run cashiers at different kinds of restaurants in New York. That's how crazy stuff is getting. In the end, it hurts the teenagers' chance to get a job.
So, here we're at with grandparents taking the teenagers' jobs, immigrants competing for those roles, machines getting rid of them, and employers choosing not to hire them. And you'd say, well, yeah, it looks like the opportunity has disappeared for teenagers. But on the other side, something else was happening, which was teenagers were starting not to look for jobs. In 1994, 20% of teenagers that were not in the workforce said they actively wanted a job. By 2014, that number was 8.8%. While kids were being squeezed out by all the changes in the world, they were also not opting in to jobs at their teenage years. Why is that? Why would kids not be interested in taking roles and jobs that pay them money?
Let's start with how kids are getting raised now. And here's a statistic that may surprise you. Despite what is everything in the media and how much scary stuff appears to be going on in social media and the news, the United States right now from a teenage perspective is safer than it has been in any of the last 50 years. But before I tell you why that is, I encourage you to take a look at my website kley.com/youtube. I make one-page summaries of all of these videos and uh, I think this is one you might want to download. So go there and check it out.
So, while the news is scaring the crap out of us and the world by data is actually safer for kids than it's been in almost any part of American history, you talk to parents and you'd think they're raising their kids in a war zone. Back when I was a kid, it was basically like be seen but not heard and they kicked us out the door and said don't come on until the street lights turn on. Today, it's exactly the opposite for kids. Uh, they have phones, they're tracked 100% of the time. My kids think it's perfectly normal that we have Find My on all their phones and know where they're at every single moment of every single day. And my parenting friends, they do all the same things. They're terrified to let their kids out the door, ride their bikes to school, or go out alone. It's rough out there. Today, in a post-COVID environment, we've all spent hundreds and sometimes hundreds of thousands of dollars nesting our homes to make them incredible for people to hang out in. Heck, my home's super comfortable. Like, I like being there. You know why? We spent a bunch of money post-COVID and make it awesome. Same thing has gone on over and over again. You see lots of teenagers who just don't want to leave the house. The average teenager now spends over 7 hours a day on screens outside of school. That's not just like a job. That's another full-time job in uh, entertaining themselves on video games over the internet.
And regulations started to get even worse. Think about a lot of where the job creation is today. DoorDash, Uber, a lot of the delivery services. You can't get those jobs until you turn 18. And by then, maybe you're not even interested. And let's go back to the idea around getting into a great college. It's a huge competition. And it's even getting more competitive. Despite the United States population doubling and tripling over the past few decades, the population of kids that gets into Harvard, man, it's still the same exact number. They've barely grown at all. And it's happened for many elite schools that kids and parents want to push their kids to. In 1985, 10% of teenagers were in summer programs designed to enrich them and prepare them better for college. By 2014, that number is almost 50%, nearly a 5x increase. And it's not just summer school. It's also going to things like preparatory trips, overseas enrichment, language classes, study abroad, man, basically everything. But here's the crazy thing. If you go talk to admissions counselors for colleges, you know what they'll tell you? They would much rather see students who've had a summer job and creating something meaningful than a bunch of kind of BS programs where the kid got shipped off and the parents wrote a big check. Crazy.
So suddenly you've got an enormous kind of tidal wave not only encouraging and making it more difficult for teens to find jobs, we're actively encouraging teens not to go out and look for them. Can you blame them? Well, I can't. And here's the crazy thing. We're losing critical mass of the teenage employment at this point. Suddenly, when employers can't hire teenagers or they can't even find teenagers who've had summer job experience before, that means they're offering fewer teenagers, having to do other stuff like get machines or hire immigrants to do the job. In the end, suddenly have fewer employers, fewer teenagers looking for jobs. It's a doom loop and it's just going to keep decreasing. This summer of 2026 is projected to be the worst summer job market for teens. Well, basically forever. And here's the saddest part of the whole thing. This basically has created what is a ticking time bomb in the labor market for the United States. What great opportunity do you have for kids to learn what it's like to deal with an angry customer or an unhappy customer or something going wrong at work and dealing with a little adversity? Then a great first job where the stakes are lower. These days now employers like me, we commonly have 20-somethings show up and mom comes along for the first interview. It's crazy.
And it's not all even across all demographics as well. Here's one stat that'll blow your mind. If you make over $150,000 a year as a household, your teen is more than twice as likely to work during the summer as a family that's barely above the poverty level. The kids who need the experience the most of a summer job and the money too are the ones least likely to get it. And all this means that a rite of passage that used to happen consistently during teenhood is basically going away. And look, over the next coming decades, we're all going to pay the price for it. In the end, we're running one big experiment with the next generation, betting that screens and summer enrichment programs are going to benefit them more than uh, working hard, earning your own money, and doing stuff outside the house where you have responsibility like an adult would. As entrepreneurs, and business owners, I think the impact on us will be pretty great. We're going to have a continued pressure to find the kind of labor that we want in the market, and it's going to keep getting tighter and tighter, and the experiment we're running with teenagers, it's not going to help that.
All right, let me know what you think actually caused all this. What's the biggest factor in the comments below? I try to read them all. Uh, this is a fun one to research. Oh, and I promised to tell you why I started this video. In front of a pool here in San Antonio when it's freaking freezing. Well, I actually had my first summer job at that pool. I was a lifeguard and I got fired cuz I needed to learn some lessons. It was great. All right, catch you next time. Fight.