The virtues of a sum­mer job

Chattanooga Times Free Press - - BUSINESS NEWS - ANN CAR­RNS

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 is 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 does not mean young peo­ple are lazy. “Teens are still busy,” he said. They are do­ing things such as 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 are 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, 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-and­mor­tar stores and to­ward on­line sales, Chal­lenger said.

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 is not a first choice. But a job means money and of­fers ex­pe­ri­ence deal­ing with bosses, co­work­ers 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 is worth check­ing again, even if you did not find a job ear­lier in the sum­mer, Chal­lenger said.

When you are 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 will 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 is not yet ready for of­fi­cial use.)

The W-4 form has a work­sheet 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 said.

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.

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