With the minimum wage rising across the country, restaurant industry observers predict that one demographic group in particular will suffer as a result: workers between the ages of 16 and 24.
In recent years, the lack of jobs for older workers in manufacturing and other industries forced them into service work in retail and restaurants, displacing young people.
As a result, fewer teens and young adults are getting entry-level experience at an early age, which can be vital for career growth. And restaurant operators may be missing out on an opportunity to recruit and train young workers for growth within their companies.
But with minimum wages rising, employers say it will be difficult to justify hiring teenagers and young adults who are less experienced, seasonal or part-time workers.
“Employers have very high expectations for a $15 wage earner, and will be looking for deeper experience in those jobs — or they will just try to eliminate jobs using outsourcing and technology platforms,” Greg Dollarhyde, former chief energizing officer of Santa Monica, Calif.-based Veggie Grill, told Nation’s Restaurant News after California state lawmakers adopted a $15-per-hour minimum wage.
The teen and young adult workforces were hit hard during the recession, according to a 2014 report by the Brookings Institution.
While unemployment rates for both the overall U.S. population and young people have improved, the overall unemployment rate has fallen to 5 percent as of March, while the youth unemployment rate was still 12.2 percent as of July 2015, according to the Bureau of Labor Statistics.
Brian Schaitkin, senior economist at The Conference Board, an economic research group, said lower labor participation rates for younger workers could be blamed in part on the loss of manufacturing jobs, as well as increased automation across all industries. While the restaurant/service sector will see labor shortages in coming years, they will likely be less severe because restaurant jobs are difficult to fully automate or outsource, and there’s expanded demand.
Others say macroeconomic trends could open opportunities for younger workers.
Outplacement firm Challenger, Gray & Christmas Inc. predicted in a recent report that the job market may be more welcoming this summer for teens partly because more jobs are available in other industries for older workers.
“This environment opens doors for teen job seekers, as those who may have been relegated to retail and restaurant jobs are moving up, which leaves a void that can be filled by teens,” said John Challenger, CEO of Challenger, Gray & Christmas, in the report.
Challenger said many teens are not in the labor force by choice. Instead, they are pursuing activities that may be more desirable for college applications, like volunteer work, summer education programs, sports or unpaid internships.
“This does not mean that teenagers have gotten lazier over the last two decades. They are simply engaged in more activities that fall under the radar of standard employment measures,” Challenger said.
“Much of this is in pursuit of college admissions goals and broader career goals beyond college,” he added. “As colleges become more competitive, teens are trying to find activities that stand out on applications. In this environment, typical summer jobs have fallen out of favor.”
Some restaurant industry members would like to change that.
Buffalo Wild Wings franchisee Karim Webb said that entry-level employers are responsible for hiring young workers that may not have another clear path to the middle class.
“We can take young people that may have been underloved or undereducated and give them the resources to climb the ladder,” Webb said. “We help young people see possibilities for themselves that they might not have seen, and then to activate the muscle of excellence.”
Starbucks is one restaurant company that is looking to tap the youth talent pool. Last year, the coffeehouse operator launched the 100,000 Opportunities Initiative, and set a goal of finding jobs for 100,000 young people nationwide by 2018.
The initiative targets what Starbucks calls “opportunity youths,” 16- to 24-year-olds who are neither in school nor working, comprising an estimated 5.5 million people across the country.
About a dozen employers have joined the effort, including Taco Bell as a key sponsor, along with Papa John’s, Red Robin Gourmet Burgers and Brews, Potbelly Sandwich Shop, Pizza Hut, Domino’s Pizza, Chipotle Mexican Grill, Sprinkles Cupcakes and Sweetgreen, along with non-restaurant employers like Alaska Airlines, Macy’s and Walmart.
For Starbucks, the effort is about building stronger communities and a well-prepared workforce.
Lacey All, Starbucks director of strategy, said: “These are your children. They are your nephews and nieces. They’re hungry and they want opportunity. Let’s give them access and a window.”