Young, bright and stuck in low-level jobs

Young Canadians, like young people around the world, are paying far too much of the cost of the global financial crisis, with high

By David Crane

Independent columnist

Young Canadians, like young people around the world, are paying far too much of the cost of the global financial crisis, with high unemployment rates, many stuck in part-time or short-term contract jobs, low rates of pay and growing pressure to work as unpaid interns.

It’s not that hard today to find young Canadians who at the age of 30 have never had a full-time, regular job.

Not surprisingly, just more than 40 per cent of Canadians in their 20s are still living at home.

A recent Bank of Montreal report showed that Canadians aged 20 to 24 are earning less than their counterparts in the same age group did in the late 1970s through early 1980s, while surveys indicate that the average level of student debt is now running at $28,000, and typically will take up to 14 years to pay off.

To be sure, those with the right skills have an easier time.

But the real problem is that businesses simply are not hiring, or if they are, they might be bringing cheaper foreign workers to Canada on temporary work permits.

Over the past 12 months, the private sector in Canada has added just 10,000 net new jobs, according to Statistics Canada, compared to the public sector, which has hired 93,500 net new employees.

There are a number of factors hurting job prospects of young Canadians. One is an economy that isn’t growing fast enough to generate the needed level of new jobs.

One reason is Finance Minister Jim Flaherty’s determination to quickly eliminate the deficit, which means a lower economic growth rate. Another problem is a mismatch between the skills young Canadians have and the skills employers say they need — with employers reluctant to invest in training or apprenticeship programs.

At the same time, there is a growing phenomenon of underemployment, which occurs when an individual’s skills exceed those needed for the job he or she is doing — think of a university graduate working in a coffee shop.

A new report from the International Labour Organization — Global Employment Trends for Youth 2013: A Generation at Risk — warns that the queues for available jobs are becoming “longer and longer” for many young people, forcing many to become less selective in the jobs they are prepared to accept, with many turning to part-time or temporary jobs.

With higher unemployment or underemployment, “valuable work experience is not acquired and professional skills may erode,” the ILO warns, while “unemployment experiences early in a young person’s career are likely to result in wage scares that continue to depress their employment and earnings prospects even decades later.”

In this sense, youth unemployment is “an unexpected tax on the current generation of youth” since “there is a price to be paid for entering the labour market during hard economic times.”

The over-qualification of young people for the jobs they end up doing has two other serious impacts.

One is that by taking up jobs they are overqualified to do, young people are crowding out other young people with lesser qualifications who would normally take those jobs, making it even harder for these young people to find employment.

The other negative impact, the ILO says, is that “to the extent that young people in employment are actually overqualified for the jobs they are doing, society is losing their valuable skills and forfeiting stronger productivity growth than would have been achieved had these young people been employed at their appropriate level of employment.”

According to Statistics Canada, the unemployment rate among young people 15 to 24 was 14.5 per cent in April, virtually unchanged from a year earlier; the number of Canadian youth with jobs actually fell by 19,000 between April and May of this year.

In fact, the unemployment rate for young Canadians has showed no real improvement over the past 40 months. Compared to a year ago, there were 18,200 fewer young people employed last month, with a gain of just 2,000 full-time jobs over the past year and a loss of 20,100 part-time jobs.

While the issue of skills mismatch is a key issue that must be addressed, not much can be done overnight.

But we can delay balancing the budget for a couple of years to increase growth and jobs.

It’s urgent that we create more opportunity and hope for today’s young people who otherwise face a grim start in their working lives, with long-term consequences.

Young Canadians deserve better.


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