Canada's youth face job crunch

While youth unemployment in Canada is nowhere near the levels of Greece, experts say that increased competition for jobs among 15- to 24-year-olds in Canada could have negative long-term effects.
The unemployment rate among Canadians 15-24 years old is twice as high as the country's overall jobless rate.

Among the world’s biggest economies, Canada’s unemployment rate is quite respectable.

Canadian youth, however, might beg to differ.

Statistical data released earlier this month shows that the country’s total jobless rate currently sits at 7.4 percent. But for those in the 15-24 age bracket, the figure is 14.7 percent — 27,000 fewer youths have jobs right now than at this time last year.

"We couldn’t be that severe and say that Canada has a jobless generation — that would be too alarmist," said Nancy Schaefer, president of Youth Employment Services (YES), the largest organization of its kind in Canada.

"But the situation is bad, because we need our young people in the workforce, we need their energy and new ideas and we need them to pay taxes."

Organizations like YES are pressing the government and the private sector to take more action by introducing more accessible co-op and professional job placements.

Economist Francis Fong believes today’s youth are in a uniquely difficult situation.

"In addition to the fact that youths are facing competition from their own age cohorts, they are now facing competition from people who just lost their jobs during the recession and have 20 years of experience in the workforce," Fong said.

In a report published March 8 by TD Economics, Fong found that increased competition leads young college and university graduates to take jobs further away from the subject of their degrees, or pulls them out of the labour market altogether.

'Boomerang effect'

According to Fong, this creates a "boomerang effect," where university graduates, unable to find jobs in their field of study, retreat into another degree or a job that can support them but doesn’t put their training to use.

"The whole process of trying to get to where you wanted to be when you got out of university takes years longer than it used to. Taking a lower wage than you were initially expecting has significant repercussions for your long-term career," said Fong.

He explains in the report that a one-percent rise in unemployment rates leads to a six to seven percent decrease in salary.

"It can take anywhere from 10 upwards to 15 years to close that gap of reduced wages. So your lifetime earnings are substantially lower, for the simple fact that you graduated at the wrong time," Fong said.

Another study, out of the Yale School of Management in 2009, indicates that the timing of a person’s entry into the job market will be a direct factor of their success.

Young demonstrators shout slogans as they protest during a rally in Barcelona on May 18, 2011. Spanish university students and youth groups were protesting against a youth unemployment rate of 40 percent. (Emilio Morenatti/Associated Press)

Even so, Fong believes Canadian youths still fare better than many of their international counterparts. In European countries like Greece, youth unemployment has reached a desperately high level of 51.1 percent, according to Reuters. For the first time in Greece’s history, unemployed youth outnumber employed youth.

Canadian youth need more help

Schaefer acknowledges that the situation in Canada isn’t nearly as bad, but she contends that it’s not being adequately addressed, either.

"We know that there are more youths who are unemployed than the recorded 14 percent, because a lot of young people aren’t collecting Unemployment Insurance or welfare," she said.

Only youth who collect UI or welfare are recorded in Canada’s unemployment statistics.

One group that is trying to carry youth forward is Ashoka, an international organization that fosters an entrepreneurial spirit among youth and tries to support them in their journey to stable employment.

The organization was established in Washington, D.C., in 1980. Since the first "fellows" — or beneficiaries — were selected in India in 1981, Ashoka has sponsored more than 2,000 fellows in over 60 countries around the world.

Ashoka partners with universities around the country and receives funding from corporate sponsors. This allows them to carry out entrepreneurial boot camps, seminars and assist chosen candidates in developing business action plans.

An entrepreneurial approach

Elisha Muskat, executive director of Ashoka Canada, says the organization’s main goal is to create a world where everyone is a "change-maker."

"One of the most important things is for people to carry an idea that it’s not just the same traditional jobs that people need to look for, but that there is real opportunity to create something of your own and allow yourself to explore outside the traditional roles that are talked about in the university environment," said Muskat.

"We encourage and support them to build action plans to how they could launch or strengthen something they are already doing," said Muskat. The action plans are then presented to a panel of businesses who decide whether to offer the students up to $1,000 in funding to make their ideas a reality.

Some of the concepts Ashoka has sponsored include an environmental company working to redesign urban spaces, a website providing interactive education tools and an initiative encouraging community involvement in energy conservation.

However bad the current situation may seem for young Canadians, Fong cautions that we’ve seen worse.

"Looking back to the ’90s, job losses were far and above worse, job recovery was worse and we had disenfranchised youth who were rebelling because they had very little opportunity," he said.

For Fong, the silver lining is that the current job market could lead to long-term improvements in the overall workforce.

"If the economic uncertainty acts as a trigger for a lot of people to go back to school and upgrade their skills, our labour force will ultimately be more productive and skilled in the long run."