The latest data from the Department for Education shows that 82 of the young people finishing Key Stage 5 in schools and colleges in 2016 - about 15% of the total - entered the labour market after completing A-levels or similar qualifications.
That compares with 124 the previous year.
Trade unions put this trend down to job insecurity and the impact of the gig economy among young employees.
Boys are less likely than girls to look for a job immediately after school – 14% compared with 17%.
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The rate of young workers for South Tyneside is below the average for England, where 22% of the students finishing KS5 got a job for at least six months after leaving school.
A total of 545 pupils finished school in South Tyneside in the school year 2015-16.
The most popular choice at the end of school in South Tyneside is to carry on studying. That option was chosen by 59% of the pupils, compared with 64% a year earlier.
Most of them opted to go to university, with 14% of the pupils going to the 24 leading universities which make up the Russell Group.
The data shows that only 14% of Key Stage 5 pupils started apprenticeships after school.
An apprentice will typically spend one day a week studying at a college or training organisation, while spending the rest training on the job under the guidance of experienced employees.
Frances O’Grady, TUC general secretary, said that poor working conditions are deterring young people from trying to find a job after school.
She said: “Young people entering the labour market now are more likely to be in insecure work and on low pay. A year on from the Taylor review nothing has happened and young workers are paying the price.”
Matthew Taylor, the chief executive of the Royal Society of Arts, published a report a year ago, commissioned by the Government, in which he called for clearer legislation on employment status to adapt employment practices to modern business models, such as the gig economy.
Ms O’Grady added: “The Government should introduce wide-ranging reforms to protect agency workers, many of them youngsters. The first priority must be to ensure all agency workers have the same rights to equal pay.”