ADP: Summer hiring remains active, but young workers face tougher labor market
Teen unemployment reached 14.6% in June, while pay growth for young workers returned to a more normal pace after post-pandemic spikes.
OKLAHOMA CITY (OBV) — Summer remains a key hiring season for young workers, but the labor market for teens and young adults has softened from the early post-pandemic recovery, according to new analysis from ADP Research.
ADP Chief Economist Nela Richardson said workers ages 15 to 24 typically account for about 30% of new hires in a given month, but that share rises above 40% in June as school lets out and young people enter the workforce.
That seasonal surge can increase labor-force participation while also pushing unemployment higher, especially among inexperienced workers looking for temporary or seasonal jobs.
Teen unemployment was 14.6% in June, up from a post-pandemic low of 11% in June 2022 and the highest June rate in a decade outside the pandemic years, according to ADP’s analysis of federal labor data. Richardson said the trend suggests younger workers are still participating in the labor market but facing a more difficult environment.
Wage growth for young workers also cooled from the sharp increases seen in 2021 and 2022, when employers competed for scarce labor. ADP said year-over-year pay growth for newly hired teen and young workers returned to 3.7% in June.
“The early post-pandemic period delivered outsized gains for young workers, but their pricing power has since diminished,” Richardson wrote. “The summer labor market is still active, but the wage premium that defined it a few years ago has normalized.”
ADP said the median wage for workers ages 16 to 24 is typically below $17 an hour, compared with $20 or more for older workers.
