With final exams and term papers wrapped up, thousands of postsecondary graduates are entering the labour market at the worst time in generations and face tough odds of getting hired as companies begin to resume operations after COVID-19 lockdowns.
Already, many graduates have seen their positions cancelled amid the economic devastation of the coronavirus pandemic, leaving them to scour websites for job postings that are in short supply. What’s available is often poorly paid and ill-suited to their skills.
“Anyone who’s currently graduating and looking for work is going to be hard-pressed to find anything,” said Philip Oreopoulos, an economics professor at the University of Toronto who’s studied the long-term effects of graduating in a recession. “My best prediction is that the impacts we’re looking at now are probably going to be larger” than in past recessions, he added.
Thus far, layoffs have been brutal for younger Canadians. From February to April, the number of employed young people, aged 15 to 24, plunged by 873,000, or 34.2 per cent. Put another way, this age range accounts for 14 per cent of the population, age 15 and up, but nearly 30 per cent of jobs lost during the pandemic. Those with university degrees were not spared, with employment down 28 per cent.
As provinces begin to reopen, graduates will find themselves lower down the pecking order of who employers bring back. For starters, more than two million people were still employed in April, but did not work any hours. Another 1.3 million were on temporary layoffs. And from February to April, the number of people permanently laid off – a group that would have some extensive work experience – increased by 1.6 million.
“If anything, [graduates are] the last ones that are going to be hired when the economy comes back,” Prof. Oreopoulos said.
Geneviève Tallmeister, who recently completed her master’s in public policy at U of T, is on the job hunt. The options are limited. She’s found many postings are ill-suited to her skill set, such as low-paid internships, or managerial positions that ask for eight-plus years of experience. When she does find something appropriate on LinkedIn, there have already been 200 applicants.
“I’m a little bit worried in the coming months – when things do hopefully start to pick up again – that finding full-time work might be a little more tricky, because there’s going to be so many people looking,” she said.
Laith Goldie, who finished an undergraduate degree in cognitive science at U of T, was furloughed from the advertising agency where he worked part-time during the school year. He’s pushing to rejoin the company on a full-time basis, but a return date hasn’t been set.
“I’m hoping to be back as soon as possible and getting a paycheque for my work again, rather than a government benefit,” he said.
In recessions, new graduates are often forced to accept jobs that are lower paid and with employers who offer little opportunity for career growth. The effects can last years.
In 2012, Prof. Oreopoulos and two co-authors published a study that tracked the earnings impact on Canadian men who graduated during recessions in the early 1980s and 1990s. In the first year after graduation, the unlucky cohorts earned up to 15-per-cent less on average than peers who graduated when unemployment rates were three to four percentage points lower.
Even worse, it took recession-era graduates a full decade to close the income gap, resulting in a 5-per-cent hit to lifetime earnings, on average. Those who switched jobs more frequently, Prof. Oreopoulos said, were more likely to recover faster.
A recent Toronto-Dominion Bank report said that graduating into a recession and earning less “can filter into many aspects of life, such as taking a longer period to free oneself of student debt and delaying home ownership and even families.”
In the coming months, many graduates will rely on benefits to provide much-needed financial support. The federal government launched the application system for the Canada Emergency Student Benefit (CESB) last Friday. Under the program, eligible students and recent graduates will receive $1,250 monthly from May to August, and $2,000 for those with dependents or disabilities.
The CESB is intended for students and graduates who don’t qualify for the Canada Emergency Response Benefit, which pays $2,000 monthly to those who lost jobs or a significant amount of income because of the pandemic.
Prof. Oreopoulos described the CESB as a “stop-gap effort” until the fall, when it is hoped “a regular job market search can happen.”
Given the current hiring climate, Ana Pozas decided to pivot. An international student from Mexico, she recently finished her bachelor’s degree in biology at the University of British Columbia. Her initial plan was to find a job and pursue her permanent residency, but now she’s opted to start a master’s program at UBC.
“I decided that [school] was a better option than stressing about jobs,” she said.
As challenging as the job market is, Ms. Tallmeister has found reason for optimism.
“I have a few friends who have landed jobs, either a few months from now or starting remote contracts,” she said. “I’m still remaining hopeful.”
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