Canada’s youth struggle to find jobs

Employment in the 15-24 grouping is still 250,000 below pre-recession jobs levels, according to a TD Bank economist.

March 9, 2012   by The Canadian Press

OTTAWA: Regardless how many jobs were created last month, one group of Canadians is almost certain to have fared badly—youth.

The consensus ahead of Statistics Canada’s (StatsCan) jobs report Friday morning was that 15,000 jobs were created countrywide in February, an indication of positive, if not modest, economic growth.

But if employment surveys of the past few years are any indication, Canadians aged between 15 and 24 will be at a disadvantage.

The recession may be over for most Canadians, but workers or want-to-be workers in the youngest age group tracked by Statistics Canada continue to experience the economy as if the recovery had never happened—or as if it was still 2008. And the younger you are in the age group, the bleaker the picture.

The finding was thrown into dramatic light in a paper from TD Bank economist Francis Fong, who points out that employment in the age grouping is still 250,000 below pre-recession levels.

By contrast, all other age groups have more than recovered from the overall 430,000 job losses of the 2008-09 slump. Workers 25 and above are more than 400,000 jobs to the good.

“Canadian youth are not facing the terrible prospects of their counterparts in Europe and the US,” says Fong. “Nevertheless, it is clearly evident that Canadian youth are facing an uphill battle, which will persist for some time.”

Historically, younger workers are hit hardest by recessions and Fong points out the age group actually took greater losses during the 1990-92 and 1981-82 slumps. The most recent recession also hit adult males hard because the slump was concentrated in manufacturing, particularly the auto sector.

Nevertheless, Fong believes today’s youth are facing some challenges unique to the times.

Unlike in the 1990s, many older Canadians are un-retiring because either they need to, or they simply want to work given that they are in better health and likely to live longer. And many baby boomers are deciding Freedom 55 is not for them and just plan to stay working longer.

A recent analysis of the job market, also from the TD Bank, found that Canadians over 55 were increasingly joining the labour force and taking jobs in traditionally youth-oriented industries, such as retail. Since the recession, one-third of all jobs created have come in this age category.

The report also showed that even during the recession, the over-60 crowd actually gained 100,000 jobs while all other cohorts took on losses.

“If you are a business and have a job opening, are you going to hire a young person with no experience or someone who had been in the work force for 40 years, knows what it’s like to work and who is eager to work? And it’s at the same wage,” Fong points out.

Almost as difficult for youth, said Fong, is that the legacy of the recession can last for years.

Two separate studies, one in Canada and one from the US, show that a one percentage point decline in the unemployment rate can result in six-to-seven per cent average decline in the initial wage for a youthful worker and that it can take anywhere from 10 to 15 years to close the gap.

“When jobs are not abundant, graduating students wind up taking lesser jobs,” Fong said. “It might take several years to find a job in the industry of choice and a lot longer to claw back what was lost in terms of wages.”

©The Canadian Press

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