California's Young Workers Struggle in Low-Wage Work Despite Critical Role in Economy

More than 2 million people ages 16 to 24 are working in California — about the same as the population of Houston — making up 12% of the workforce. They comprise a critical portion of the state’s economy, according to a new report by the UCLA Labor Center.

But many young people earned low wages, worked long hours — often while going to school — and lacked sufficient worker protections and benefits. These hardships may impact their financial future and the state’s economy for years to come, said researchers who examined the years surrounding the COVID-19 pandemic, 2019 to 2021.

“Young people are critical actors in California’s vibrant economy and labor force,” says the study, released Nov. 9. “Yet, young workers in California find themselves navigating a tumultuous landscape of societal shifts, economic challenges, and the lingering aftermath of a global pandemic.”

About 64% of California’s young workers earned low wages — defined as about $18 an hour, two-thirds of the median wage — and 60% reported difficulty affording their expenses, researchers wrote.

The assumption that young people work at service-oriented, low-wage jobs temporarily before they’re propelled to full-time careers isn’t necessarily true, said UCLA researcher Vivek Ramakrishnan. Many young people stay in low-wage jobs for years.

“When we’re looking at the data, we’re seeing young people are really struggling in these kinds of roles,” he said, adding later, “There’s a sense you can get stuck working in the service industry.”

The report analyzed data from multiple sources, including the U.S. Census Bureau’s American Community Survey, the COVID-19 Household Pulse Survey — which documented the impact of the pandemic — and the federal Bureau of Labor Statistics.

Young workers reflect California’s growing diversity. About three in four are people of color and more than half are Latino. About 15% of high school-aged young people worked full time and half of young people ages 19 to 24 worked full time.

Young workers’ trap

In the service industry, 40% of young workers are employed in bars, restaurants and retail.

These young people run the risk of being caught in a “circular labor trap,” the study says, because these low-wage service jobs are structured with little room for growth or skill development.

“When you have these skill sets that are hyper-specific toward these industries, and not much room for growth, it’s hard to compete against students who may take an unpaid internship in a very content-specific area of expertise and gain connections in the career they want to go into,” Ramakrishnan said.

Because so many service industry jobs were considered frontline jobs, the pandemic was particularly disruptive for young people, who often had to choose between their health and their income. And when grocers and restaurant businesses closed during the pandemic, younger workers, especially young people of color, experienced higher levels of unemployment or underemployment compared to older workers in other industries.

In 2020, the unemployment rate for California’s young workers increased to 18% from 9% the year before. That was twice the rate of workers ages 25 to 64.

Unemployment among young people has since rebounded to pre-pandemic levels at 8.7% nationally, according to the Bureau of Labor Statistics (PDF).

While many young people are stuck in lower-wage jobs, the research suggests they are contributing significantly to their household income. And about 12% of young workers are heads of households, according to the report.

Young workers are overrepresented in households living below the poverty line compared to those over the age of 25. About 14% of young workers lived in poverty compared to 5% of older workers, according to the report. A third lived in households with incomes below 200% the federal poverty line. That number in 2021 was $53,000 for a family of four.

Working through school

Along with responsibility for helping family members cover basic expenses, young people often have to balance work with education, in pursuit of a better future.

About half of young workers go to school. and about 40% of them worked 15 to 29 hours a week, the report says. One-fourth of workers in high school, and more than half in college, worked 20 hours or more a week. And about 17% of young workers worked 40 hours or more weekly.

Postsecondary education became more essential for a stable career, yet with education costs increasing, it was less accessible for young people, according to the report.

From 2018 to 2020, the share of California high school graduates enrolled in postsecondary education within 12 months fell from 65% to 63%, according to the study.

While nearly all racial and ethnic groups experienced declines in college matriculation, Black college-going rates plunged from 61% to 55%, and American Indian and Alaska Native rates dropped from 53% to 47%.

Nationally postsecondary enrollment began rebounding last fall, though study researchers said they don’t know yet if that’s the case in California.

Meanwhile, from 2019 to 2020, young peoples’ average student loan amount increased from $6,847 to $10,000.

On-the-job training?

One in three jobs in California requires some college education, the study notes. Yet as higher education costs and student debt climbed, job earnings haven’t kept up.

Aside from education, researchers found other pathways toward higher paying jobs and careers also are not very accessible to young people.

For instance, trade apprenticeships are significantly underutilized. In 2022, there were about 80,000 federally registered apprenticeships in California, but only 24,000 were filled, the study said.

Latino workers held the majority of apprenticeships, 66%, while Black young people held 4%. Most apprenticeships went to young men, 94%, while young women held 6%.

Many apprenticeships are linked to unions. While surveys show young people are more pro-union than ever, they’re underrepresented in unionized jobs. Just 9% of young workers are union members, compared to 19% of older workers.

Ramakrishnan said the data paints a “scary” picture of the realities young people face, but it also highlights some areas where policy changes can help.

He noted that Gov. Gavin Newsom recently signed a measure by Assemblymember Liz Ortega, a Democrat from Hayward, that directs California high schools to educate students about workers’ rights and the labor movement.

There’s a need for other career programs that offer young people training and school credit, Ramakrishnan said.