Blogs & Comment

Canada's youth are hardly making gains in employment

Here's a silver lining for young Canadians seeking work: at least you're not looking for jobs in 1983, or in Greece.

It’s May, which means thousands of young Canadians are now ready to flaunt their newly-minted degrees on the job market. Like cohorts before them, they’re entering a market that’s defined by its sluggish recovery and weak prospects. However, the most recent labour force survey from Statistics Canada showed signs of hope: youth unemployment was 13.9% in March, a 0.8% decrease from the previous month and 0.5% lower than the same period last year.

But other stats are more sobering. The youth unemployment rate is still roughly double the overall rate. Participation rates (the percentage of the population either working or looking for work) have dwindled amongst teenagers. Post-secondary students are graduating with an average debt load of nearly $27,000. And the job market has yet to fully recoup the jobs lost by young Canadians during the economic downturn.

In other words, the recovery is underway, but it’s far from complete.

TD Economics released a report about youth unemployment a couple months ago. It showed that teenage workers have suffered the most in job recovery, as you’d probably expect, while workers between the ages of 20 and 24 have almost regained their job losses. (TD analyzed data ranging from October 2008 through January 2012.)

“Even after the recession’s end, the recovery has been almost non-existent for youth in aggregate – just 1,300 net jobs have been added over the last two and a half years,” the report says. “In contrast, employment among those over the age of 25 years is currently a strik­ing 400,000 jobs above its pre-recession level.”

Young Canadians are having particular trouble finding jobs in the retail sector. While the construction, manufacturing, and accommodation and food services sectors have added jobs for youth, the retail sector has shed 14,000 since July 2009. That’s in addition to the more than 41,000 retail jobs youth lost between October 2008 and July 2009. TD Economics says that workers aged 60 and over “have begun to increase their footprint” in retail, meaning tougher competition for teenagers with short CVs.

So how does the current situation stack up with previous recessions?

From a purely visual standpoint, you can see that youth unemployment rates spiked to higher levels during recessions in the 1980s and 1990s. In the most recent economic downturn, Canada’s youth lost about 52% of overall net job losses. But in the early 1980s recession, youth suffered a 69% share of job losses. In the early 1990s, their share was nearly 78%.

“Firms heavily favour employees with seniority when adjusting employment; as a result, youths tend to be laid off first and rehired last,” said a government report from 1997.

The same report also mentions the importance of education in finding employment, noting that “youths with more schooling consistently exhibit lower rates of unemployment than their less educated counterparts.” Indeed, more and more young Canadians are enrolling in universities and colleges, partly in response to a rough job market.

But even with more young Canadians hitting the books, a big part of our national discourse on unemployment is focused on the lack of good or appropriate work once they graduate. By now, you’ve probably read countless stories about baristas with master’s degrees or Harvard grads with six-figure student debt and minimum wage salaries.

Just last weekend, The Globe and Mail’s Margaret Wente wrote about the plight of young professionals. “The cost of a degree has gone way up, and the economic benefit it confers has gone way down,” she wrote. “Think twice before you encourage your daughter to go to law or med school, especially if she’ll have to borrow heavily to do it.”

Of course, Canada’s situation looks rosy compared with other countries. In Greece and Spain, the number of youth looking for work is higher than those with jobs. The overall youth unemployment rate for the European Union is nearly 23%, the Eurostat agency reported yesterday. And in the United States, the rate is 16.4%, according to March figures.

So while Canada’s youth unemployment situation is far from ideal, it does compare favourably with other job climates, both historically and abroad. At this point, it seems more an issue of what type of work young Canadians can find, and how long it will take them to reach financial adulthood.