The Virtues of a Summer Job
| Photographs By Milkos
The share of teenagers working summer jobs had dwindled for years, but the numbers have come back a bit in the last couple of years. It’s a change applauded by educators and financial advisers alike.
“Summer jobs are a great idea,” said Laura Levine, chief executive of the JumpStart Coalition, a nonprofit group that promotes financial literacy. “Money management begins with how to get that money in the first place.”
Working a summer job is less common among teenagers than it once was, according to an analysis published this month by the Pew Research Center. As recently as 2000, roughly half of those between the ages of 16 and 19 worked summer jobs, but that proportion dropped to about 30 percent during the financial crisis. Last summer, it rose to 35 percent.
This year, hiring of teenagers got off to a strong start in May, although the pace slowed slightly in June compared with last year. Still, the combined total of about 1.08 million jobs added for those two months is above average for the past decade, according to an analysis of federal data by the outplacement firm Challenger, Gray & Christmas.
Andrew Challenger, the firm’s vice president, said the longer-term trend away from summer jobs doesn’t mean young people are lazy. “Teens are still busy,” he said. They’re doing things like volunteering in hurricane-stricken areas, taking extra classes or honing their sports skills to burnish their college applications. They may be making a calculation, he said, that such experiences make more of an impression on college admissions staff than a summer job scooping ice cream.
Whether they’re working to help support their families, saving for college or building a fund for some other goal, young workers should have a plan for the money they earn, Ms. Levine said. Earning a steady paycheck for the first time can make teenagers feel “cash rich” and lead to overspending, she said. “It can disappear quickly.”
Deciding ahead of time to put a certain amount into savings and spend a small amount on entertainment makes teenagers less likely to squander their earnings, she said.
Even though the overall unemployment rate has fallen amid a stronger economy, teenagers can have a hard time finding temporary summer jobs. The retail industry, for instance, a traditional place for teenagers to land summer work, is shifting away from brick and mortar stores and toward online sales, Mr. Challenger said.
Ms. Levine said, “Even when the job market is good, it does take diligence, and a willingness to be flexible.” That may mean taking a job that’s not a first choice. But a job means money and offers experience dealing with bosses, co-workers and customers.
In parts of the country where students will return to school in mid-August, much of the summer is already gone and employers may not be as eager to hire as they were in the spring. But often, entry-level jobs suitable for teenagers have high turnover, so it’s worth checking again, even if you didn’t find a job earlier in the summer, Mr. Challenger said.
Here are some questions and answers about summer jobs:
Why did my summer employer give me a tax form?
When you’re hired, your employer gives you a Form W-4, also known as a withholding allowance certificate, which tells the employer how much tax to deduct from your paycheck. The amount withheld is based on the number of so-called allowances you claim; the more allowances claimed, the less money withheld for taxes and the more cash you’ll see in your paycheck, said April Walker, lead manager for tax practice and ethics at the American Institute of CPAs. (The form is being revised because of last year’s tax bill, but the new version isn’t yet ready for official use.)
The W-4 form has a work sheet to help you decide how many allowances to claim, but it can get complicated. So even if you expect to earn relatively little income, you should consider claiming one allowance, or even zero allowances, to help cover any tax bill, tax experts say.
If you end up having too much withheld, you can get a refund by filing a tax return next year.
The Internal Revenue Service offers more tips for students with summer jobs.
Can I put money earned from a summer job into a Roth I.R.A.?
Yes. If you have earned income, you can open a Roth I.R.A., a retirement savings account, and begin saving and investing the money, said Mark Luscombe, principal federal tax analyst at Wolters Kluwer Tax & Accounting. Saving early, even if it’s just a small amount, means your investment will have a long time to grow. Your parents or another relative can even add money to the Roth for you, up to the maximum amount — $5,500 for 2018.
Why not just take the summer off and work during the school year?
Having a job during the school year can be fine, as long as you don’t overdo it. There’s a link between intense school-year employment — 20 or more hours a week — and the risk of dropping out, said Jeremy Staff, a professor of sociology and criminology at Penn State University. So it’s wise to limit your hours, if you can afford to.
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