Some experts credit the years-long decline to an economy offering fewer low-skill entry-level jobs than in the 1970s and 1980s. Fortune pointed out those positions, what remained of them, were increasingly being scooped up by older workers, “many of them foreign born.”
Additionally, college become a natural step for teenagers. Far more than it was 40 years ago, at the least. In turn, teenagers from affluent families, eager to secure admission to top universities, Fortune said, “have for years chosen summer academic programs over jobs or have pursued ambitious volunteer work in hopes of distinguishing their applications for college.” Others leaned toward competitive sports, like AAU and other travel programs designed to lure scholarships.
But, naturally, this summer is something of a unicorn. Thanks to COVID, the economy is bursting in sectors that generally covet seasonal labor. Restaurants, bars, retail, amusement parks, etc.
And given the uncertainty of vaccine rollouts in April and May, employers have scrambled to catch up on hiring to serve pent-up demand in recent months. Restaurants chief among them.
Snagajob said teenagers are reentering the job market rapidly, up 35 percent year-over-year. Vaccines are giving parents piece of mind to send them back. Plus, unlike adults, teens aren’t eligible for unemployment benefits. One other point—there are six times more college deferments than the year before.
There was a time when teenagers took jobs and accepted the negatives. It was an understood growing pain to sign up for hourly work, for low pay, and generally poor conditions.
That’s altered in a gig economy flooded with remote opportunities. Teenagers are now able to set their own terms. Hence the wage lifts, better benefits, and also the reality they can pick and choose from a lineup of brands they want to associate with. It’s why Chipotle is trying to position itself to a demographic it believes can strengthen its base, and do so in an arena they identify with, like TikTok.
Why Gen Z?
Seventy-five percent of the restaurant workforce in 2020 was Gen Z or millennials. Of the 6.55 million workers employed in food preparation or service at the end of the year, 39.4 percent were Gen Z, 35.6 millennials, 11.6 percent Gen X, and 13.4 percent Boomers.
Specifically, of the 655,000 quick-service workers, 65 percent were under the age of 25 (Gen Z). Only 7 percent were Baby Boomers.
Meanwhile, past realities are pulling in the opposite direction. Former President Donald Trump previously suspended J-1 work-and-study visas as a coronavirus precaution. Foreign workers, often brought in on these, tended to fill summer jobs across the country, Fortune said.
In the wake of Trump’s decision, however, the number of U.S.-issued J-1 visas plunged 69 percent in the fiscal 2020 year. It fell to 108,510 from 353,279.
Older Americans have been hesitant to return as well.
Health concerns, as well as childcare issues in the face of shutdowns, continue to linger. And as mentioned, adults can tap into expanded unemployment benefits, which end nationwide September 6.
To Chipotle’s example, restaurants are scrambling to shed barriers for teens to apply. Wendy’s allows applicants to apply via smartphones. They’re screened through AI. Papa John’s is offering $50 referral bonuses for corporate team members for every new hire they bring in, with an additional $50 bonus paid to the new team member. Taco Bell was conducting interviews from people’s cars.
Fast casual Curry Up Now, as mentioned in the Fortune article, pays $2 above minimum wage and is offering a fund for teens to pay for classes or books, in addition to free Zoom classes on how to manage money.
The teenager boon will undoubtedly take a hit when the summer ends and people rush back to school. But hopefully some of the other pressures will ease in tandem. Remote learning will transition back to in-person and unemployment benefits will slide off.
What isn’t likely to adjust, however, are wages. BTIG analyst Peter Saleh told QSR the pandemic-driven imbalance between consumer demand and availability of labor drove a spike in wages and commodity prices. While commodity prices should moderate once supply catches up with demand, wages and higher prices are a different story.
History tells us once wages climb, they don’t revert. The same is true of menu prices.
And so, one of the lasting imprints of COVID might just what it does to the race to $15—a top-tier topic before the crisis. At this pace, a long-term journey could become moot in a matter of months.
It’s been 12 years without a penny increase in the $7.25 federal minimum wage. Will it matter, however? Or will the current labor climate speed up the wage process before the government does?
Either way, on a broad scale, customers should expect to pay more for their food as an after-shock of wage pressures. Between 2015 and 2019, the average menu price increase, per Knapp-Track, was 2.4 percent. Saleh expects effective price to near 4 percent this year to offset higher rates.
“I think is all going to stick,” Saleh says.