Front Burner - Young people can't find jobs. Is Canada's economy in trouble?

Episode Date: August 26, 2025

The unemployment rate for Canadians between 15 and 24 is at 15 percent, the highest it's been since 2010, not including the pandemic.Why can't young people find a job? And how do these numbers fit into the wider health of our economy at the moment?Economist and Atkinson Fellow on the Future of Workers Armine Yalnizyan is on the show to talk about these numbers, why they stand out and what could be done to prepare and protect the economy from a world of near-constant uncertainty.For transcripts of Front Burner, please visit: https://www.cbc.ca/radio/frontburner/transcripts

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Hi, everybody. I'm Jamie Poisson. Like, no interviews, no emails, no phone calls, nothing. So this is Violet. She is 17 and about to move from Toronto to Guelph for her first year of university. Violet began looking for a summer job in January. or February of this year, determined to work and save up some money before she started school. I counted, like, how many resumes I handed out. It was, like, over 30, I want to say.

And then at least, like, maybe 15 online through, like, Indeed and, like, online job websites and stuff. It was a lot. So you can't be accused of not trying? I tried so hard. She says that most of her friends are in the same boat, unless they manage. to get a job with the city lifeguarding or working at a city-run camp. Obviously, there's the hope that, like,

I'll be, like, going to school and then when I get out, like, everything will be better, but, like, that's not magically going to happen. So I don't know, like, realistically, like, how worried I should be. And, like, if this is just going to keep being the situation, like, what can I do to prepare or, like, make myself a better candidate?

Because, like, I don't know. The numbers, they really back up what Violet is saying. The unemployment rate for Canadians between 15 and 24 is at 15%. The highest it's been since 2010, not including the pandemic. Today on the show, I am joined by economist Armin Yonnesian. We're going to discuss why young people can't find a job and how this all fits into the wider health of our economy at the moment. Armin, hey, it's great.

great to have you as always. Oh, it's terrific to be with you, Jamie. Let's start with this youth unemployment numbers, so nearly 15%. Just explain to me why that's so significant, why it's making headlines right now. Well, the issue here is that it's high youth unemployment relative to a couple of years ago. It's even high compared to any time since the pandemic hit, you'd have to go back to 2010 to see such high unemployment rates, but it's not historically high. What makes it really different is its relationship to everybody else. Everybody else's unemployment rate did not go up as rapidly. So what makes young people so much more unemployable now than they were just before the pandemic hit is a really big and important question mark?

Can you try and answer that for me? Like, why is it that their number is so high? when everybody else's is not nearly as high? Well, there's two factors that are going on. Youth is defined as 15 to 24 years old. And there's more people just in that very next category, 25 to 29 years old, that are doing a lot of the jobs that youth used to do. And that is kind of part of this whole failure to launch story, where we keep nudging the age that people get to actually start adulting.

And that's partly because more people are going to school, but it's also partly that the very low-paid jobs anybody will grab because their rents are too damn high. So they'll keep working at whatever because they can't get the next job in their lives. And that's a structural phenomenon, not a cyclical phenomenon. And usually youth unemployment goes up when we're in an economic downturn. Now, add to this story, everything that Mr. Trump is doing, everything that is doing, everything that going on with concerns about technology. And, you know, you've got this perfect storm of conditions that make it hardest for the smallest cohort of young people in Canada's history

since the 1960s to get a job. It doesn't make any sense from a demographic point of view. But when you pile on all those geopolitical and technological stories, it makes perfect sense. Well, just expand on that for me a little bit. How is this storm created by Trump specifically impacting this group. And then let's also move on to technology specifically. I want to talk about the threat of AI with you. Sure. I mean, the Trump effect is basically keep everybody on their back foot. That's his M.O. Nobody knows what he's going to do next. Only he knows what he's going to do, and he'll tell you when he's good and ready to tell you, and he might change his mind 10 minutes later. So that makes it impossible for businesses that we're going to hire to decide to hire, because they might

have to lay off in six months. So there's less hiring going on than there would have been otherwise. And that has a trickle-down effect. It takes you from the type of jobs that everybody's doing to the type of jobs that young people do in retail, in hospitality, in summer camps, in whatever it is that young people tended to do in previous summers, even as recently as one summer ago, there's fewer jobs in everything but retail. Retail is the only area where young people got more jobs this year than last year. And there's been quite a growth in retail jobs. But that's about to be threatened. So the interesting thing about more retail jobs, people think, well, AI, right? I know. That's what I was thinking. That surprised me. I would think that there

would be less retail jobs because of stuff like automated cashiers. And then on top of that, I have a lot of questions about AI. I know we don't necessarily, it's not necessarily showing up in the data, right? But you have lots of people talking about how AI is going to essentially wipe out the bottom tier for people's careers. Like, I'm thinking of this New York Times op-ed that I read a little while ago from LinkedIn's chief economic officer. And he essentially saying it would eliminate a ton of these kind of first-stepped jobs for a new generation of workers. I don't know whether that's true or not. Everything that we've been told about AI, including the reasons that were given that have propelled a gold rush in investors investing in AI have not yet panned out. They could,

but they haven't as yet. What is distinctive about this phase of technology is that there are five big players, Amazon, Apple, Meta, Google, and Microsoft that are leading the charge on what we are calling AI, which is actually a lot of different types of technologies, designed sometimes to hold your attention for longer, sometimes to make you lease more, sometimes to make you buy more. Sometimes it will replace your job. It isn't always about job replacement. And sometimes it's about job enhancement. And we don't know how the technology that they are developing is going to be deployed. But I just want to go back to your automated checkout story. That's decades in the making. It started off at gas pumps and then move to grocery stores. And it's only the big guys that do it. It's the big

chains that do it. So it's not like the entry-level retail jobs are a thing of the past. As I said, you know, this year compared to last year, there's more retail jobs being held by young people. But there's fewer jobs in hospitality, which is bars, restaurants, and hotels. There's fewer jobs in transportation and warehousing. There's fewer jobs in construction. So that's something to keep your eye on is what are these entry-level jobs that these, you know, foreheads are talking about in the New York Times that they think is going to be disappeared. A lot of entry-level jobs are high-touch, low-wage. And anything that is high-touch but not easily automatable is not going to get automated by AI. I think we use AI as a kind of term for technology. We don't know what

it is yet, but it could take our jobs. Well, I'm thinking about a couple of things here. just listening to you talk. So the first would be, we talked about how that older group is kind of smushing down into the younger group, right? If AI took away jobs like junior coders, like legal assistants, junior accountants, stuff like that, would they not then take the jobs that normally younger people would have? And just on the issue of animation and retail, do you think it might be coming? And I say this only because I was in Madrid this spring and I went into Azara. And there was almost, basically no one was working there. You checked yourself out.

There was almost nobody on the floor. And it was essentially self-serve. Well, that's really interesting. And I hated it. I will say I hated it. Well, see, that's the feedback they've been getting from places like Whole Foods. You know, that whole idea that you can walk into a store and walk out again, you don't actually need to go through a checkout.

It knows what you were buying and it'll charge it to your card if you've got to smart this or a smart that. people hate it. And so it's not an accident that we've got more retail jobs this year than we did last year, notwithstanding the problems with youth unemployment. As for the jobs, the paralegals, the coders and stuff like that, we're not talking about youth here. We're talking about young adults that have finished their education and they're in a job. Will AI replace these jobs? Maybe. I don't know. Guess who just bundled their home and auto with Desjardin insurance? Well, look at you, all grown up and saving money. Yes, I am. Mom told you to do it, didn't she? Yes, she did. Get insurance that's really big on care.

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and just take me through that? Well, the scarring effect is now being added on to the lack of being able to adult effect where people can't leave home. Or if they're living with roommates, they can never graduate to their own place or their own relationship with their own place. So this whole thing about not having the job that takes you out of your parents' circle or out of this incredibly dependent on strangers' circle, to something more independent

is half of the story. The other half of the story is the insane costs of housing and just general costs of living that keep you infantilized. So both sides of the coin need to be addressed. I find it fascinating

that free trade was sold to us, not on how great it was going to make our jobs, but on how cheap it was going to make things for us. We keep trying to separate out who we are as human, into either consumers or workers where we've got like two pockets. One is where the money comes in

and one is where the money goes out. And so you do not deal with the wholeness of who you are, which is you need money to survive, but how much you need is also a function of how society functions. It's like systemic. So these are some of the problems about scarring. Scarring involves, you know, you don't get that job that you were trained for,

that you went to school for and you just have to work as a, you know, work pouring coffee or serving meals or whatever it is that you choose to do to be able to cover your rent, that'll show up on your resume for years to come and you will not be able to make your career progression in terms of an income progression that you might have otherwise if you landed where you had hoped to land at a school. That's the economic scarring effect, but just as important in terms of economic terms is the inability to take care of yourself because the costs are too high. Yeah. And just the mental health implications of that and the inability to start a family. Anyways, I do not think that we need to explain to many of the people listening here how hard it is out

there. Okay, so let's talk about some of the things you'd like to see to try and make this situation better. Like, I imagine that if there was some sort of deal with the United States, would it bring about some alleviation here? But surely that's not the only answer. 100% if we could get a so-called deal with the United States, by which you mean stability, then we could work with the new situation, whatever it is. The whole point of this relationship with the United States

is there is no stability. There is no certainty. That is his MO is to keep everybody on their back foot. And so you can't actually plan in a way that you might have been able to plan, and that has a cascade effect on industries that are not trade-sensitive. So people have said, you know, if you can't get a deal with the U.S., the next best thing is to improve international trade with other partners or internal trade. Well, the problem with the international trade story is that the U.S. takes 75% of our exports. For us to lose even 10% or 15%

means we have to double, sometimes triple our trade with our next biggest trading partners, which are China, the United Kingdom, and Europe. And that takes years to happen. So we are looking at some problems between now and then. And in terms of internal trade, Ontario and Quebec is the source of the manufacturing base in Canada. And if these mostly foreign-owned firms in auto and steel

and maybe aluminum, but certainly other durable goods, decide to pack up their machinery and go south of the border because our market is too small and it's too expensive to serve the American market, then we lose the industrial capacity that permits us to propel internal trade. And it doesn't matter how many regulations you drop if you don't have the capacity, you don't have the capacity.

So I think there's a possibility here for dealing with all of those things by actually focusing on the domestic economy with a domestic industrial strategy. The only thing we have heard from the federal government on this front is that we are going to be spending more on defense. And so how we spend more on defense

is absolutely critical, whether it's military Keynesianism or simply developing, you know, trade ties and defense ties with European allies, that's categorically a different way of using the same taxpayers' dollar. either to stay at home to create jobs or to be leaked offshore, actually defend ourselves against a very aggressive southern neighbor.

Yeah, can you just explain that to me a little bit more? I imagine some people might hear military Keynesian and say, I'm going to be like, what is that? Well, a few months ago, we found $9.3 billion in the couch cushions, which is great, I guess, if you want to spend more. And then we committed to spending double what we are currently spending on defense. So the big question for Keynesianism is, if your private sector is under attack, is it time to step up public sector spending? Well, here's the public sector spending that has been promised. Does it stay in Canada and create jobs and create industrial capacity?

Or do we use that same dollar to buy things from the Europeans or the Americans to strengthen both trade and strategic geopolitical? political alliances. That's a big question mark, and we don't know how it's going to be answered. This government has also talked a lot about launching national projects, right? Anything from pipelines to ports, big mining projects. etc. Like, what are your thoughts on that? We also have heard nothing on what those projects are. Well, that was the first thing I was going to say is not sure what the projects are,

but the ones that have been talked about the most in terms of infrastructure, mining, oil and gas, that sort of thing, are very capital-intensive and not very job-rich. So they will not be replacing in terms of job count the jobs we know we are in the process of losing that are all. already on temporary layoff and may turn out to be permanent layoff in the auto and steel sectors and all the related sectors to that. What I find really striking about this domestic industrial strategy that we've got, how we're going to spend our own taxpayer money to build up

industrial capacity is the sound of silence on the issue of the care economy, which is the biggest industrial sector, health and education is the biggest industrial sector generating GDP, and people are freaked out about not being able to access in a timely manner, health care, child care, long-term care, and there's crickets coming from the federal government on that. That surely should be part of industrial strategy. It would be as much of a defense strategy as anything else. Why do you think that is? Why the crickets? I don't know. I think the big part of I mean, I'm a woman, so I view the world through this lens. A lot of the people that are making decisions are men,

and they are certainly dealing with an unhinged man who is focusing on very male-oriented industries and defense, war. So all of these things are boy jobs. And the Prime Minister of Canada would be crazy not to address these things, but to address only these things and not pay attention to the half of the voting, population that brung him to the party. And there's no acknowledgement of the issues families and particularly women who provide most of the unpaid care are struggling with right now. It certainly

isn't limited to just women, but it would be a nice nod to say, we understand that you don't have a doctor, that you can't find an affordable child care space, that you don't know what to do with your aging parent. And we have a solution for that because it is the number one source of jobs in Canada. And this is our opportunity to make every one of those jobs a good job in Canada, paying a living wage, paying benefits, making sure you have a pension and you have some control over your hours. So you want to go back to that job the next day and provide excellent care. There was some recent modeling from the Bank of Canada suggesting that if the tariff situation doesn't change much, at the moment, the majority of the goods that we trade with the U.S.

or QSMA compliant, the pain is really being felt in specific industries, that if it doesn't change by much, Canada will likely avoid a recession. How are you thinking about that? I think it's the job of all central banks and organizations like the International Monetary Fund, which also, just a few weeks ago, said, oh, we thought it was terrible in April, but we've changed our mind. It's not so terrible. It's the job of all of these international institutions. to take a look at the data, to be data driven. And the data is old. The data is looking at the future through a rearview mirror.

And the data is dependent on what Canadians and people all over the world did after Mr. Trump came to town, which was to stockpile, to produce really quickly and ship really quickly, to try and hedge their bets that he wasn't being serious. Well, that moment has come and gone. And inventories are running down. and the proverbial shit is about to hit the fan in the coming months as inventories run out

and it becomes clear that not only was he serious about the tariffs, you don't know what kind of next craze he's going to introduce to the geopolitical environment. So we have to count on data, especially when you're in institutions like that. But if you're reading the news day to day, I can't see how we avoid a recession in the coming months.

And I have to say, I don't think we're recession ready. I know that the EI program isn't recession ready. But the good news is we could be if we focused ourselves. Armeen, thank you. It's always great to have you. Thanks very much for having me back. Notwithstanding the door things that I bring to your table. All right, that is all for today.

I'm Jamie Poisson. much for listening. Talk to you tomorrow.