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Hire 'em young
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June 11, 1997: 12:32 p.m. ET
Tight labor markets prompts firms to seek teen work force
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NEW YORK (CNNfn) - Just like NBA teams today, many employers are going out to high schools looking for teen stars. Recent data showing a tight labor market back the trend, which sees firms looking toward students with high-tech backgrounds.
On CNNfn's "Who's In Charge?," John Challenger, president of employment firm Challenger, Gray & Christmas, recently discussed the trend with Jan Hopkins.
Here are some highlights ...
CHALLENGER: We've seen the number of kids [ages] 16 to 19 who are working in computers for companies go up to … 480,000 people, compared to just over a couple thousand a decade ago.
HOPKINS: Now, John, what's happening to these kids? Are they working around going to school, or are they not going to school?
CHALLENGER: They're doing both. Many companies, especially for the most talented, are offering inducements to bring kids in over the summers. And then right after they graduate from high school. And then offering them the potential for tuition reimbursement, asking them to go back to school at night. And at the same time (the companies are) taking advantage of all that technological expertise and comfort (the kids) have in learning new systems.
HOPKINS: Quite a difference from a couple of years ago, when it was hard for these kids to get jobs.
CHALLENGER: Three years ago it was a tight labor market, a different kind of labor market. Grads were having a hard time getting out into the marketplace. They were competing with many more different … segments of the population, looking for entry level jobs.
But … we're right now in an incredible period for jobs and hiring. That 4.8 unemployment [rate] that we saw just the other day is the lowest number since the early '70s. Job creation continues to be strong -- over 3 million jobs in the last couple of years. As companies especially have just added technology into the way they do their work, there's more and more demand for talented youngsters.
HOPKINS: One of the things that we saw in the last report was that the creation of new jobs had actually slowed somewhat. Is that, in your view, also because the labor market is so tight?
CHALLENGER: I really do think that that is less due to the fact that companies aren't growing or don't want to expand. It really has to do more with the fact that companies just can't find enough people for the jobs.
That really does mean skilled workers, but that comes in many categories, not just information technology. … That's happening in manufacturing, where now almost 25 percent of the work force has some degree of college education.
HOPKINS: But what about the workers that are already on the job? They don't seem to be asking for more pay, yet.
CHALLENGER: Well, that's the dilemma. I think what we're seeing now is a shift. Employers have been using downsizing as a valve to control their wage inflation. They can't raise their prices, so they've got to keep their costs down.
What we're seeing, because of this tight labor market where companies just can't downsize to the degree that they were, is ... they're using really wage cost reduction. What they're doing is they're making more and more of the pay based on performance. They're continuing to do everything they can to control the costs in terms of health insurance and in terms of pensions.
And what they're doing is they're paying the top 25 percent of their work force, the most talented, more money ... and then the rest of the population, the 75 percent, they're really almost applying a wage freeze. 
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