Nearly 1 in 10 youth 'economically at risk'

Unemployment among youth age 15 to 24 is nearly 2.4 times that of older Canadians, and despite record high rates of school enrolment, many graduates are getting stuck in a no job-no experience, no experience-no job cycle, a CIBC report on youth unemployment has found.

Standard youth unemployment rate doesn't tell the whole story, CIBC report suggests

More young people than ever are getting an education, but fewer have job experience, which is making it harder for them to find work. (Mark Blinch/Reuters)

Unemployment among youth age 15 to 24 is nearly 2.4 times that of older Canadians, a record wide gap, but that figure doesn't capture the entire cohort of economically vulnerable youth and some of the nuances of the job situation for young people, a report on youth unemployment from CIBC World Markets Inc. has found.

According to Statistics Canada, 14.3 per cent of Canadians age 15 to 24 who are in the labour force were unemployed in 2012, compared to six per cent of workers age 25 and up. In the agency's April 2013 labour survey, the rates were little changed, at 14.5 per cent  for those 15 to 24 and 5.8 per cent for those 25 to 54.

But the CIBC report argues that most youth unemployment statistics don't capture the whole picture and that it's important to look at the work situations of specific cohorts of the young population, which numbers about 4.5 million.

High school students between age 15 and 18 who are looking for part-time work, for example, should not be counted as unemployed, the report suggests. But youth between 15 and 24 who are not enrolled in school or participating in the labour market should be captured.

Those young people number 225,000 and are an important component of the employment picture, the report says. It is this group — along with  those young people who are not enrolled in school but who are registered as unemployed — that gives the most telling picture of youth unemployment, the report says.

"From a policy perspective, this is the pressing problem as this combined group consists of 420,000 economically at risk youth, or nearly one in 10 of young Canadians," said the report's author, Benjamin Tal, deputy chief economist of CIBC World Markets Inc.

"These youth face a harsh job market environment, real entry barriers and likely do not have the skills necessary to compete."

The report warns that this group of unemployed youth will likely remain chronically unemployed unless action is taken to provide them with specific education and skills.

Education not enough

An education alone, however, is not a guarantee of employment any more, the report warned. While more youth are getting a higher education today than ever, "increasingly, students are completing their education without any work experience and are more likely to be caught in the no job-no experience, and no experience-no job cycle," the report said.

About 44 per cent of those age 20 to 24 are enrolled in school but only 76 per cent are in the labour market.

"One in five youth not working today has never held a job," the report said. "That is 40 per cent higher than the long-term average and just shy of the record high reached in the late 1990s."

Lack of job experience is making it harder for youth to enter an already tough job market.

Traditional career opportunities are drying up and finding summer employment has become more difficult, which also makes it harder for students to fund their education.

Temporary and contract work is on the rise, with 12 per cent of young workers in these types of jobs, compared to eight per cent in the 1990s.

More innovation, flexibility needed

Traditional co-op programs are no longer enough to smooth the transition from school to the work world, the report said.

Government job initiatives need to be more focused and politicians need to put measures in place today to limit the hardship that young Canadians could face in the next economic slowdown, the report said.

"One of the priorities of the Canadian education system needs to be more innovation and flexibility in combining education and work-related training," Tal wrote.

"Research is also needed to better understand how concepts such as team work, creative thinking, problem-solving and leadership skills enhance the employability of students and then, to find ways to incorporate these concepts into the curriculum."