Jacob Huang, who came to Toronto from Vancouver and is hunting for job as a junior financial analyst in the investment banking industry photographed in a playground of a school near his home in Toronto, June 16 2011.Fernando Morales/The Globe and Mail
Canada's younger workers are still struggling with stubbornly high unemployment two years into the economic recovery, fuelling frustrations for the generation hardest hit by the recession.
And while it is normal for the youth job market to rebound more slowly from an economic downturn, some experts warn more is at stake this time.
Globalization is creating competitive pressures that are spurring companies to put a higher premium on experienced workers. And it is not just uneducated 15- to 24-year-olds who are having trouble finding work: Employment agencies are seeing a deluge of university graduates, many with professional degrees, desperate to land a job.
Young people are often advised to wait out a tough labour market by pursuing graduate degrees or other skills training, but many are already financially tapped out and saddled with hefty student loans.
So there are growing calls for Canada to overhaul its 14-year-old Youth Employment Strategy to help younger workers prepare for the labour market – or support further education. An aging population cannot afford to have its young people stumble over the transition from school to working life, some warn.
"I am sensing a sense of frustration like I have never seen before around young people and this labour market," said Nancy Schaefer, president of Youth Employment Services, a Toronto-based non-profit organization that offers job counselling, training and work placement for young people, including those considered at-risk.
The youth unemployment rate was 13.9 per cent in May compared with the national average of 7.4 per cent. While there is always a sizeable gap between the two rates even in robust economic times, young people are still waiting to realize major job gains from this recovery.
"I didn't anticipate it to be this difficult because through my whole entire working career, I've never been unemployed," Jacob Huang said. The 25-year-old has a bachelor of commerce degree from the University of Victoria as well as overseas work experience, and he speaks six languages.
He has sent out about 300 résumés leading to 20 phone calls and 10 interviews – including a handful of employment scams – but no career job. To pass the time, he's working in a gym and studying for a chartered financial analyst designation.
Craig Alexander, chief economist at Toronto-Dominion Bank, estimates that the youth job market is running about one to 1½ years behind the adult job market. "The hope would be that they would actually stay in the educational system and develop greater skills that would then later help them when the labour market improves, but the evidence is not strong that that is happening," he said.
Santiago Perez of Toronto graduated this month with a bachelor of engineering degree in aerospace from Ryerson University. He said a graduate degree is out of the question – he already owes $30,000 in student loans, and repayment begins in early 2012.
After six months of job hunting, he has yet to snag a single interview: "Everyone in university knows it is going to be hard, but no one knows exactly the type of hard that it is going to be."
Stagnation in youth employment is worrying because students who graduate during poor economic times are at higher risk of "scarring" or sustaining long-term damage to their nascent careers.
According to the Certified General Accountants Association of Canada, 13 weeks of unemployment can reduce next-year wages by 3.4 per cent for a full-time worker, while a six-month spell could hurt income for as long as four years after.
Currently, the federal government invests almost $340-million each year in the Youth Employment Strategy, which was designed to assist Canadians aged 15 to 30 with skills development and finding a job.
"So why is there still a high unemployment rate?" Ms. Schaefer of YES asked, adding that existing youth employment programs are underfunded. Her agency receives government funding.
She is pushing for a more robust national strategy that better connects postsecondary education to the evolving needs of the labour market. Her wish list also includes debt relief on student loans and more subsidies or tax incentives for employers to hire young workers.
Jeff Burry, director of employment programs at the Youth Services Bureau of Ottawa, agrees businesses should get bigger subsidies to offset the costs of hiring and training young people, especially since minimum wages have risen in many provinces. He also wants more guidance counselling so young people have a clearer idea of what jobs will be in demand, including the trades.
Armine Yalnizyan, a senior economist with Canadian Centre for Policy Alternatives, said young people who do find work are coping with other stresses, including eroding job security and less generous benefits. That's making it even tougher for them to start families and buy houses – activities that fuel economic growth.
"The big question," she said, "is where is the next middle class going to come from?"
Rita Trichur