Canada’s youth employment problem
February may be the shortest month on the calendar, but in Canada it often feels like the longest. Winter is dragging on, the weather is erratic.
This year, however, there was unexpected brightness in those 28 days — though it has only just become apparent now.
Canada’s national unemployment rate for the month held fast at seven per cent — the lowest level since December 2008 and well ahead of what economists had been forecasting. In January, almost 22,000 jobs were suddenly lost after a seasonal rally in November and December. In February, however, almost 39,000 new ones sprouted under the snow and ice.
That means that over a million net new jobs have been created since the end of July 2009, when Canada’s economic recession technically ended. And given the importance of jobs and employment to any and all governments — and aspiring governments — that’s a statistic that is going to be in wide circulation for some time to come.
But what you’re less likely to hear about is how those jobs shake out demographically.
The data shows that older Canadians (those 55 and above) were the main beneficiaries of this improvement. They are healthy, energetic, experienced and, to an unprecedented degree, available.
But their popularity with employers means that youth unemployment (the 15- to 24-year-old category) clocked in close to 14 per cent — double what it is for the rest of the population. Overall, full-time employment for young Canadians is down 2.5 per cent from a year ago.
As economic cycles wax and wane, the dearth of opportunities for the emerging generation of workers is nothing particularly new.
In the 1982 recession, it was 18.2 per cent. In 1992, it hit 17.9 per cent. Historically, this group has been the last to benefit from any economic recovery.
The pattern may be fairly well established, but the long-term costs of extended youth unemployment are reaching alarming heights: A recent report from TD Bank indicates that over 18 years, youth unemployment will cost the Canadian economy about $23 billion. And even a period of unemployment as brief as a year can have dramatic negative effects on earning power later in life.
The hit to GDP growth is calculated by TD economists at 1.3 per cent over the next 18 years. Given that national economies are growing annually at two or three per cent these days, that’s a big bite.
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