In September, youth unemployment in Canada jumped to 14.7 percent. This disturbing rate is the highest it’s been since records began, outside of the years of the COVID-19 pandemic. This is an alarming statistic that describes the struggles young Canadians are faced with. They face enormous challenges in trying to break into an ever more competitive and hostile workforce. Economics experts and recent graduates have voiced their concerns regarding the impact of these conditions on the future of Canada’s youth.
Lauren Hood, a 21-year-old graduate of political studies, is emblematic of the challenges many young people face in a rapidly changing economy. Over the last four months, she’s been applying for 50 jobs to get just two interviews. Hood expressed her disillusionment, stating, “In my mind, after completing the four years and getting my degree, I didn’t think it would be as challenging as it’s proven to have been.” She further shared feelings of inadequacy, saying, “I feel behind, even though I just graduated.”
Kari Norman, an economist with the Federal Reserve, underscored alarming youth unemployment statistics. These numbers are symptomatic of a longer economic trend in Canada. “Youth unemployment is more typical of a Canadian recession,” she noted. As businesses across the country are finding it increasingly difficult to attract post-pandemic labor, these strides come at a critical time. In response, the federal government is lowering barriers to immigration to bring in more foreign workers and international students. Ottawa recently rolled back the new arrivals’ welcome wagon. Norman thinks this would go a long way towards rebalancing job prospects in the long run.
The acceleration of artificial intelligence into multiple industries made this essential first step for young workers even more complicated. Now, AI is filling many of these roles that historically have connected new graduates to their very first jobs. Consequently, these graduates have fewer opportunities to earn valuable on-the-job experience.
Lisa Taylor, founder of the Challenge Factory, told us these effects on the job market will be felt well past their immediate effects. She labeled them as “economic scarring.” She asked whether Gen Z is facing a huge existential crisis. Looking back at past generations, are they just completing milestones a bit slower than those who came before them. “Is Gen Z screwed? Or is it just that they’re taking longer to achieve the different milestones that we have this idea should be happening sooner?” she asked.
The effects of unemployment rate increases go beyond just immediate job loss. They impact long-term economic security, too. CEO of the non-profit Generation Squeeze, Paul Kershaw, highlighted the dramatic changes in the time required to save for a home. In 1986, people between the ages of 25 and 34 took an average of five years to save for a 20 percent down payment. That was the average time required to obtain a representative home in Canada. By 2021, the national average had skyrocketed to 17 years. In key markets such as Vancouver and Toronto, it got as high as 27 years! Kershaw sees a hard road ahead for those young adults. By 2024, he even predicts it’ll take close to 14 years for them to save enough money for a down payment.
As a result, career prospects for young workers are at an all-time low. In barely five years, full-time employment plunged from nearly 70 percent in 2019 all the way down to under 60 percent today. Consequently, students find themselves trapped in a morass of extended schooling and escalating indebtedness. Norman cautioned that students struggling to make ends meet would likely stay in school longer. As a result, they may have had to take out even more loans in order to afford their education. “They will ultimately end up graduating with more debt than they otherwise would have had,” she said.
Youth employment is now rebounding, showing month-over-month increases in October and November. Net–net, total employment numbers remain barely above those lows registered over the summer months. Many economists assert that youth and other vulnerable populations tend to be the first to feel the impact when job postings dwindle.
For Hood, even with her disappointments, there is still a flicker of optimism. “I am still very grateful to have the chance to get back to work,” she acknowledged. She reflected on how her experience mirrors that of her peers: “I don’t really have stability in my life or even a schedule,” she admitted.
Especially now with young Canadians looking at rising unemployment and economic precariousness as one of the central demons of our times. Their obstacles are much more than simply seeking out available job openings. The effects of these trends will undermine their careers and personal lives for decades to come.
