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Young Workers Seeing Fastest Wage Gains of Any Age Group

By NAM News Room

The increase in young workers’ pay is largely a product of the high demand for labor in service-sector jobs, according to The Wall Street Journal (subscription).

By the numbers: Median hourly wages for young workers were 10.6% higher this January than they were in January 2021, according to Atlanta Federal Reserve Bank data. This number more than doubles the 4% gain for all workers over the same period and represents the highest 12-month wage increase for young workers in 25 years.

Service-sector wage increases: Forty-six percent of hotels and restaurants and 33% of retail businesses reported raising wages because of the pandemic and work shortages, according to Labor Department data.

Demographic trends and less competition: There are 3% less people aged 16–24 in the U.S. today compared to 10 years ago. Teens and young adults are also competing less for jobs. The number of people aged 16–19 working or looking for work has fallen 17% since 2000. For ages 20–24, that number has fallen 5% since 2000.

Mass retirement also provides opportunities: “The surge in retirements and job-switching among older workers has made employers more open to opportunities for younger workers, said Ron Hetrick, senior economist at Emsi Burning Glass, a labor-market analytics company. An additional 1.5 million people were retired from February 2020 to April 2021 than would have been retired if pre-pandemic trends had continued.”

Employers sweetening the deal for young workers: To attract young workers, some employers are offering incentives to new employees, including signing bonuses and college tuition incentives. 

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