Sitting on the Sidelines: Young People Miss Out on the Recovery

As is well known, the youth unemployment rate remains high, and well above average. It stood at 14.1% in November or more than double the unemployment rate of 6.3%  for persons aged 25 to 54, and 6.2% for those aged 55 and over.

What is a little bit more surprising is that the youth unemployment rate, while down from the recession peak of over 15%,  has risen over the past year – up by 0.5 percentage points – while it has fallen – by 0.3% percentage points- for those aged 25 and over.

Young people were hard hit by the recession, and have been mainly sitting on the sidelines during the recovery.

In fact, youth now make up almost one in three (29.1%) of Canada’s 1.4 million unemployed , but account for only one in seven (14.2%) of Canada’s employed work force.

What is even more striking than high youth unemployment is the very large proportion of young people who have given up looking for work, and are, therefore, not counted as unemployed.

Between November 2008, just after the recession began, and November, 2011, the youth unemployment rate rose from 11.9% to 13.5%. Meanwhile the participation rate of young workers fell quite dramatically, from 65.5% to 61.7%. (These data from CANSIM Table 282-0001 are not seasonally adjusted.)

The decline in the youth participation rate has been somewhat more marked among men (66.5% to 61.7%) than among women (64.5% to 61.6%.)

As a result of rising unemployment and more young workers dropping out of the labour force, the employment rate for youth – that is, the proportion holding a job, any job – fell from 57.7% in November, 2008 to just 53.4% in November, 2011. (The fall was from 57.5% to 52.4% for men, and from 57.9% to 54.4% for women.)

And, for those young people still working, the proportion in part-time jobs has risen from 49.6% to 50.8%.

It is interesting that the fall in the employment rate for youth has been heavily concentrated among students. Between November, 2008 and November, 2011, the employment rate of young people who were students (full or part time) fell from 44.4% to 39.2%, much more than for non students whose employment rate slipped from 77.9% to 77.2%. No doubt that translates into much increased levels of student debt.

Canada does not have the sky high youth unemployment rates of some European countries. But young people are the major victims of Canada’s recession and tepid (perhaps now stalled) recovery. Many young people are still in school, but most still want and need part-time and seasonal jobs, and those leaving the educational system definitely want and need full-time decent jobs related to their field of  study.

The employment situation of young people should be a much more prominent part of the discussion over our economic and labour market policies.

3 comments

  1. This is a big issue. It definitely needs to be emphasized more in our policy discussions. The problem is the youth are not learning the right skills. There’s a shortage of jobs in AB and SK, especially in the energy sector. A masters degree in psychology in today’s world is not as valuable as a welding diploma or an engineering degree specializing in fossil fuel extraction. Education is only useful if you can apply it. We have to bridge the gap between the demands in the job markets and the expectations of our youth. They don’t need more education, they need focused and strategic education.

  2. This could be a good thing. If young people are spending more time in school instead of working, which almost certainly explains a not insignificant part of your numbers. Higher educational attainment will help our economy in the long term.

  3. I couldn’t dissagree more with liquid independenc, on the point of expectations. Firstly a psycology degree is not so useful without annother background yes but there are more useless lone degrees like english/literature. The real problem though when it comes to this type of education is that students don’t know or understand what job markets are like for the perspective professions at the moment nevermind into the future. So it becomes quite difficult for them to make informed decissions.

    The other major problem is that more academic classes like econ, psy & history are cheaper. Much cheaper in fact. With tuition being as much as it is here in bc it’s hard to muster the funds for a compairibly competitive degree in the sciences. My point is that high tuition costs and the cost diferences between fields create perverse incentives.

    I tried to become a tradesperson. Unless you can find a company that wants to hire you on, you’ll never get in even if you do a pre-training course and the costs to get into them are also high, which is annother perverse incentive.

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