One in 10 young Canadians economically at risk
TORONTO, June 20, 2013 /CNW/ - Canadian youth are more educated than
ever but are facing challenges their parents didn't and are
increasingly struggling to find lasting and meaningful jobs, finds a
new report from CIBC World Markets.
"The economic reality for youth today is very different than that of
previous generations," says CIBC Deputy Chief Economist Benjamin Tal.
"While young Canadians are resourceful and capable of adjusting to the
pulse of an ever changing labour market, they are faced with problems
unknown to their parents. The current environment of part-time work,
temporary jobs, corporate and government restructuring and downsizing
is especially tough on young people whose lack of experience and
seniority make them much more vulnerable to labour market changes."
The CIBC report notes that while the youth unemployment rate is at its
historical average, the ratio between youth unemployment and the
unemployment rate for older Canadians is now at a record high. "With
youth unemployment running at nearly 2.4 times that of Canadians aged
25 and older, one begins to see the growing challenges for younger
Canadians to find lasting and meaningful work."
Mr. Tal, who delivered his report to a group of Grade 10 scholarship
students from across the country in downtown Toronto today, notes that
getting the right education is no longer enough. "While more education
is positive, increasingly, students are completing their education
without any work experience and are more likely to be caught in the no
job-no experience, and no experience-no job cycle.
"In fact, one in five youth aged 15-24 not working today has never held
a job. That is 40 per cent higher than the long-term average.
Statistics show that youth who gain work experience and receive on the
job training while studying are much more likely to find suitable and
To truly understand the economic impacts of youth employment, Mr. Tal
looked at youth aged 15-19 separately from those 20-24 and
distinguished between those in school and those not.
He found there are about 225,000 youth who are neither in school or in
the labour market - with the majority (68 per cent) being in the 20-24
age group. "When you add this group to those who are not enrolled in
school but registered as unemployed, you get a clearer picture of youth
unemployment. From a policy perspective, this is the pressing problem
as this combined group consists of 420,000 economically at risk youth,
or nearly one in ten of young Canadians.
"This target group accounts for 5.9 per cent of total youth aged 15-19
but a significantly higher 12.5 per cent of those aged 20-24. These
youth face a harsh job market environment, real entry barriers and
likely do not have the skills necessary to compete. This group will
likely remain chronically unemployed without action to re-educate or
provide themselves with skills training."
On the positive side, Mr. Tal notes that school enrolment is at a record
high with 83 per cent of those 15-19 in school and 44 per cent of those
aged 20-24. At the same time, for the older age group, the labour
market participation rate fell to a record low of 76 per cent,
reflecting a tougher job market and the need for additional education.
Mr. Tal's study found that once leaving school youth are becoming
increasingly under-employed. About 22 per cent of teens and 14 per cent
of those aged 20-24 who are non-students are only working part-time.
This is a record high for both age groups and a significant increase
from previous cycles.
"About 70 per cent of these youth working part-time are doing so
involuntary—meaning they want to work full-time. Moreover, we have seen
a significant increase in the share of young workers in temporary and
contract or term employment from about 8 per cent in the late 1990s to
just under 12 per cent. This is a much greater increase in these
positions than we have seen in the aged 25+ category."
The report suggests that classifying 15-18 year olds who are enrolled in
high school and also searching for part-time employment as "unemployed"
really overstates the magnitude of youth unemployment. "A point can be
made that many of these high school students should not be classified
as unemployed as their main activity is learning," says Mr. Tal.
"Adjusting for this factor brings the unemployment rate for this age
group down from close to 20 per cent to only 5.4 per cent. This factor
also works to reduce the national unemployment rate from the headline 7
per cent to 6.4 per cent. However, to the extent that this phenomenon
represents the growing proportion of high school students that need to
participate in the labour market in order to financially support their
families, this should be seen as a worrying trend."
Mr. Tal believes that the improved understanding of the dynamics of the
youth unemployment problem means that initiatives taken by the
government and corporate Canada can be more focused and effective in
preventing further worsening. "One of the priorities of the Canadian
education system needs to be more innovation and flexibility in
combining education and work-related training.
"Research is also needed to better understand how concepts such as
team-work, creative thinking, problem-solving and leadership skills
enhance the employability of students and then, to find ways to
incorporate these concepts into the curriculum. For Canada's economy to
grow and our standard of living to remain high, this is an imperative."
The complete CIBC World Markets report is available at: http://research.cibcwm.com/economic_public/download/if_2013-0620.pdf
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For further information:
Benjamin Tal, Deputy Chief Economist, CIBC World Markets Inc. at (416) 956-3698, firstname.lastname@example.org or Kevin Dove, Head of External Communications at 416-980-8835, email@example.com.