The Agenda with Steve Paikin (Audio) - Why Can't Young People Find Jobs?

Episode Date: December 4, 2024

Youth unemployment in Canada has reached 14.5% - the highest in over a decade. Experts are citing consequences as worsening mental health, higher rates of crime and social unrest. Ultimately, the population of youth is outnumbering older generations. How are we going to employ the next generation?See omnystudio.com/listener for privacy information.

I'm Matt Nethersole. And I'm Tiff Lam. From TVO Podcasts, this is Queries. This season, we're asking, when it comes to defending your beliefs, how far is too far? We follow one story from the boardroom to the courtroom. And seek to understand what happens when beliefs collide. Where does freedom of religion end and freedom from discrimination begin? That's this season on Queries in Good Faith,

a TVO original podcast. Follow and listen wherever you get your podcasts. In a fractured information environment, isn't it hard to tell what's real and what's not? I'm Molly Thomas, host of a new show called Big If True. We're fighting misinformation one story at a time. Subscribe on YouTube and follow us on Instagram. Youth unemployment in Canada has reached 14.5%, the highest in more than a decade.

Experts are citing consequences such as worsening mental health, higher rates of crime, and social unrest. The youth population actually outnumbers the older generations. So how are we going to employ the next generation? Let's ask on Manhattan Island in New York City, Brett House, professor of economics at the Columbia Business School. And with us here in studio, Farro Mohammed, CEO of the King's Trust Canada, and Nation Chung, Vice President of Community Impact

and Mobilization at United Way Greater Toronto. And it's lovely to have you two here in our studio with us. Brett great to have you on the line from New York City and let's just start with some stats here. Farah these are your stats Deloitte and the King's Trust Canada. Sheldon if you would bring these up and I'll kind of read them out for those listening on podcasts who can't see. Here we go these are the economic and social costs of youth unemployment in Canada. Some big takeaways here.

14.1% of all workers in the country are 15 to 24 years of age. 14%. One in four of all unemployed workers are under the age of 25. More than 14% of youth aged 15 to 24 are unemployed, as we suggested in the intro. 850,000 youth aged 15 to 29 are neither employed nor engaged in education and training. And I don't think we have to use our imaginations too much to consider what that portends. Farah, your initial reaction to those numbers. Well, look, you know, it's jarring

It's drawing if you think about these young people if you think about the consequences of it And so we have to sort of step back and say this is not a new thing You know we were speaking in the green room This is something that's been going on and the problem now is that we have people who are going to retire Young people who are not in the system. So how are they meant to advance? higher, young people who are not in the system, so how are they meant to advance? That's why we commissioned this report to have a really good data set because people pay attention to numbers and to wake people up and say look we've got to galvanize some action around this.

You're on the front lines, you're in the community, you see this. Does this jive with what you're seeing? Absolutely. Steve, we've been seeing this since we launched our youth success strategy in 2014 and we did research to understand all the barriers that a number of young people across the GTA have been facing. And there in 2014 we were starting to hear the despondence amongst young people who are graduating from post-secondary and wondering what am I going to do with this degree? There's no job market for me to enter.

So these are young folks who followed all the rules, who entered into the education system, who went through post-secondary education and came out with certification, a degree that was not applicable in the job market. And so there was at that time an early sign there's a misalignment between the needs of employers and what individuals are graduating with in the post-secondary institution. Let's get some historical perspective then from Brett. Brett, how did we get here? Well, to give that perspective, it's worth breaking the numbers down a little bit and

looking at how they're defined. The unemployment rate is the share of young people who are in the labor market, are looking for a job and can't find one. And that is, as you noted, a rate that has crept up to the highest level that we've seen in a decade, but it is worth noting it has been much higher at various points in the past.

So the shakeout from the pandemic is having an effect on young people looking for work, but we are not in unprecedented territory. The other thing to look at is participation rates, which weren't in those numbers that you put up earlier. Those are the share of people within the 15 to 24-year-old age group who are actually engaged in the labour market, either employed or unemployed and looking. And those rates remain lower than they've been in about four decades.

They've crept back up to where they were pre-pandemic, but are still not quite there. And we see a persistent imbalance between young men and young women, where young men, both here and in many Western economies, are participating in the labor market to a lower extent or lower rate than their female counterparts and that's what's reflecting that number of 800 or so thousand young people who are neither in school nor looking for work nor in jobs. Those are the people I'm most concerned about. Okay let me get you to follow up on that because I think I'm hearing two things Brad. On the one hand, you're saying our labor participation

rates are not where they need to be. I also hear you saying the unemployment rate is stubbornly high, but I also hear you saying it's been worse in the past. So put it in perspective for us, how concerning is all of this to you? I think it's deeply concerning in that we've seen that unemployment rate progressively creep up since 2020, the heart of the pandemic. And that reflects in part, what have been a couple tough summers

for students looking for work. It also reflects changes in the economy as a result of the pandemic. And we know that young people are typically employed in more precarious sectors, smaller businesses, and in the service sector, all of which took it on the nose during the pandemic. So there's some structural issues underlying these numbers that are not going to be solved quickly and require our attention.

And we'll figure out what attention is required as we still set this up. Farah, what kinds of jobs are young people looking for today that they're having trouble finding? So let's begin with recent graduates. You know, as you said, they've done the work. They come out, they're looking for these jobs, and they can't get jobs in entry-level positions. These are the ones that start them up for success. The reason they can't get them is, one, there's more competition. Two, we're having employers ask for things that are a little bit unreasonable.

For an entry level position, do you really need three years of experience if you can't get the experience? Number one, do you really need to get a graduate degree? Should you be bilingual? All of these things are barriers that are being put in front of young people. I don't know about you, but my first job was shredding paper and photocopying. It taught me all types of things. You know know resilience because I need to show up on time you know communications all these different skill sets that young people are not going to get so they're not finding jobs in part because of the structure you're quite right and in part because we're just putting too many barriers in front

of them. Nation you mentioned that the United Way has been on this for a decade. Have you made any progress? Well, we set out to reach 10,000 youth, young people, in 2014. We've exceeded that with reaching the needs of over 11,000 young people. And we've learned a lot along the way. For some of those young people who do face a number of barriers and are not finding the same success rates in the education system, there's a necessary wraparound support system for those young people.

And those wraparound supports provided by a network of community service organizations across the GTA that are focused on the needs of communities and those are our partners on the ground. So wraparound supports, mental health, cognitive behavioral therapy is making us we saw that making a significant difference in the first year of our program as we were trying was we were assessing the data and seeing who's finding the early success and the programs that had that wraparound supports and understood anything from child care, transportation supports, emotional well-being supports, and in some programs, cognitive and behavioral therapy,

we were starting to see a different outcome amongst those programs. I don't want to take anything away from the good work that you are doing, but 11,000 on a base of 850,000 people who need it means clearly there's a lot more to be done. Absolutely. So what do we need to do? So I think there's a couple of things

that we've been talking about in the sector for quite some time. We need to start to look at broader adoption of micro credentials, of recognizing young people who have experiential learning that complements the formal education but brings things like leadership skills, great communication skills. If an individual is working at summer camp or a seasonal job that employers are able to track and able to actually document what skill sets and competencies are these young people building and then it's recognized more broadly across their employment journey.

So we've been talking about that micro credential and that portable credit passport credit or recognition amongst employers as one of the solutions. I think the investment from all levels of government in summer job programs and employer supports are foundation that needs to stay in place to continue to promote employers providing those early opportunities for young people to build the skills that you and I depended on. I started out in Pizzanova, went on to Harvey's and then I started shredding paper at Fasken Campbell & Godfrey. When it was Fasken Campbell & Godfrey? I'm starting to wonder about you two both in shredding

businesses. Are you in some kind of secretive cult here or something? We're not going to discuss it. No, OK. Well, let me go to Brett on this then. That's certainly one aspect of the solution that Nation has brought to our attention. I'm going to ask about temporary foreign workers. Those numbers have been high in recent years.

And I guess people are going to be wondering whether they are taking, quote unquote, taking jobs away from made-in-Canada youth who might want those jobs. What do the numbers say on that? Well I do want to open by underscoring that immigration has been a massive net positive for Canada and continues to be even with some of the concerns about the rapid growth that we had in inflows over the last few years. Temporary foreign workers are a distinct class of folks coming into the country. They're here on multi-year or shorter term visas and they're typically brought in to fill labor market needs in specific sectors.

And it is worth underscoring that over most of the last decade, the sectors that have been the biggest beneficiaries of temporary foreign workers are some of the areas that are typically targets for young people seeking entry-level work. Restaurants, resorts, hotels, meatpacking, typically low-skilled jobs that do not require the credentials that we've just discussed and are an entryway into the workforce. Those inflows of temporary foreign workers into those sectors were driven by requests by businesses in those areas. And I think it does raise a question about why we are bringing in people into a low-skill, low-credential part of the

workforce where young people could fill those jobs who are here in Canada. The question is, will employers be willing to pay the wages that are required to bring in local hires rather than the foreign workers they relied on in the past? Or will they move to automation? Right, that's one of the good questions. The other question, and Farah, I don't know if this is empirically provable evidence, but it's certainly anecdotal information that we get from time to time, which is made in Canada kids won't do a lot of the harder

jobs that temporary foreign workers are brought in by businesses to do. What can you tell us about that? There's always a percentage of people who fall into that category. The people that we meet, they're high potential, they want to work, and they will do those jobs. I want to come back to just one thing about credentials.

You're absolutely right. We need to do this. We have created a skills academy. With Humber College, it says, look, all the employers are saying, you want to see this? Great. We put it into an academy. They're going to get credentialized. If employers are saying to us, we need to see this and we're providing it,

then it's up to the employers, I would say, to say, OK, let's take a different mindset. Let's think about how we hire. Let's think about what we're looking for. And the point about not paying them well. It is expensive to live in Toronto or anywhere in this country now. So we need to also really be honest about why are we employing people outside of the country versus inside the country?

Well, would you bump the minimum wage to $25 an hour? I'd bump it up for sure. I would bump it up. But we also have to be mindful of what that means for businesses. Everything is cyclical. You don't have young people working. There's going to be a drain in terms of the people who are able to pay Social Security later in the years.

You've got a retiring population. You've got young people are saying I want to work. I went to school I want to buy a house want to go on this break vacation Whatever the case may be and this the entire cycles not working and that's like that That is a that is the bigger problem nation You got to help me understand something here because the vast majority of my interactions with young people are Extremely positive. Yes, and I I find young young people are extremely positive. And I find young people who are smart, ambitious, they want to work, they want to get ahead, etc. etc.

On the other hand, the vast majority of stories I hear from employers are, they don't show up on time, they want more vacation time, they're a bit lazier than we were back in the day. Would you help me understand which is more accurate here? I would frame it first, Stephen, saying we're going through a transition from an industrial labor force mindset to a digital labor force mindset. And I think that context is very, very important.

I think we have young people who are coming into their adulthood at a peak in which values are changing around rights, work-life balance that perhaps our previous generation that was roll up your sleeves and grind all the way through until your mental health falls apart. That was the value of a particular generation and young people are now with a greater awareness and understanding of health and well-being, of equity rights, are showing up in the workplace with a different mindset and that can be perceived as challenging or lazy and I think that's an oversimplification of the complexity of the young people who are entering into the labor force with a greater

understanding and expectation of what their workplace has to offer. And I think that the businesses that understand that mindset and are adapting are reaping the benefits of the talent because people will shift. I've heard from public sector workers of young people who have gone through the interview, accepted a position, got their credentials, got their laptop and in two weeks they're like, oh no there's something better. It meets I can work hybrid. As another example the reality of hybrid working has shifted the labor force expectations of a generation and so all of that can be oversimplified into wanting too much, demanding too much, or lazy.

And I think that it's a distorted perspective on the desire of young people to work, but it's also their expectations of what a workplace looks like. Brett, I want to put one of the numbers that we used off the top to you, because it really is disturbing, this notion that 850,000 young people, 15 to 29, are not only not employed, but not engaged in any education or training either. And I want to put to you this study by the Pew Research Center, which found that fewer younger American men have been enrolling in college over the past decade, and men who are not college-educated are leaving the workforce at higher rates than men who are.

Can you give us some better understanding of why this trend is happening? Because as everybody knows, the more education you get, the better a job you're going to get. It's just one of the, it's one of the givens in this world. More education, better job. So why is this happening? And you see your point about more education leading to better labor market outcomes in the data. Unemployment rates for young people are always and durably higher for people who

have not or just finished high school. And with more tertiary education, those unemployment rates go down. Why are we seeing lower participation rates among young men? I should clarify that is not just a phenomenon in the United States or Canada, but it is one, as I mentioned, across a number of Western economies. And that's happened as participation rates for young women have consistently gone up over the last 40 or 50 years. It is probably a byproduct of technological change and globalization where some of the trade, industrial, and mechanical jobs that required just a high school education are being either

eliminated by automation or trade with other countries, or are being shifted into other regions and sectors that require mobility and that mean that getting those jobs requires a bit more of an investment. And some of that mismatch between where people are, which skills they have, and where the jobs are has grown, notwithstanding the fact that we have more online job postings, indeed LinkedIn and other ways to connect people to the right positions, it is still getting harder to do so. We are also seeing a mismatch in some cases between the kind of skills training

that people are getting in vocational schools and colleges and the shifting demands of labor markets. So the need for educational institutions to keep up with those shifts has never been greater. And Brett, I'm going to do this follow up with you because you are actually in Donald Trump's home state right now of New York. We know the gender gap on voting, right? There was a bromance out there between young men, well, men in general and Donald Trump. I think a 13 point gap, men over women on economic issues

as it related to their votes for Trump. Do men today, and young men in particular, really think Donald Trump is going to solve their economic dilemma issues? You know, I should clarify, Donald Trump is decamped to Florida, which is a lower tax state, and has done so in order to reduce his tax burden amongst other things. The lessons from

the US November 5th election are still being drawn out and learned, but for macroeconomists, I think one big set of numbers to reflect on is that Barack Obama was re-elected in 2012 with a US unemployment rate at 7.9% but inflation was only around 1.8% and price levels had increased by only 8% over the four years of his first term. Contrast to the last four years, prices have gone up by 22% and wages haven't entirely kept up with that in many parts of the economy. But unemployment is down at 4.1%, just off a historic low last year at 3.4%. The Biden-Harris team thought they would be rewarded for getting more people back to work despite the increase in prices. And the lesson I take from this election versus 2012

is that the people who vote don't care so much about whether some people at the margins have got jobs or not. They care about one big data point they see every day, and that's the cost of living when they go to the pump, into the grocery store, or into a restaurant to pick up lunch. And with that 22% increase in prices, I think folks across the board felt that they were far worse off than the unemployment rate implied that the economy is doing as a whole. That's a very insightful point. I've heard that that is really

perhaps the number one takeaway from the last election for president the United States. Farah, let me ask you about this. We've talked about male participation rates in the workplace. Women are participating more in the workplace now. The numbers have been going inexorably in that direction for the last 50 years or so.

The participation rate gap between men and women is shrinking. Do we have every expectation that that will continue going forward? Look, I'm a big believer in trends. I think that question is a tough one I think a lot of things depend on whether or not we're creating the atmosphere for women to move ahead Progress is a big big thing, you know incentives to stay in I Have seen for sure a trend where it goes up. I've also seen women walk out of the workforce because they're not getting the supports that

they need. Child care is a very big one. If you're meant to be a mom and somebody who's working, if you don't create an atmosphere where they can do both, they will leave. And so that's the one thing I would say we need to look out for. Child care, I mean, we need to look out for. Child care, I mean, we're told, has never been better in this country. Not for everyone.

Not for everyone, to be sure. But we certainly have more attention to child care issues by federal and provincial governments across the country than perhaps ever before. I agree. But it needs to be equal to the demand. So right now we have a Really big divide I would argue between people who want it people who can get it And so it is better But it's not where it needs to be so that women are not making the choice not to work. Gotcha. Okay nation. Let's hit on this

last few minutes to go here this I mean The metaphor of a ticking time bomb is a bit of a cliche, but the reality is if you've got this many hundreds of thousands of people out there with no jobs and no prospects, that's a huge problem. What are we gonna do? I think at the individual level, the population level, Steve, I think we have, as mentioned before, we've got a concern with growing mental health amongst young people. I think this is not just exclusive to young people.

We're seeing it in the workplaces that there's a greater demand for mental health supports even amongst adults. I would say that's intense amongst young people. And so we have to be very attentive to the mental health issues that are growing amongst young people and the high suicide ideation rate that has been increasing. At the larger more structural pieces as mentioned by Farah earlier we've got a growing population we've got and we've got a generation that's coming up that doesn't have the access point to build the skill sets the competencies and the confidence to support the labor force that's going to be necessary to generate the tax dollars that's supporting an aging population. So we've got a lot of work

to do. We have a lot of work to do and to be able to understand what needs to happen at all levels of government across corporate sector and businesses. I know business especially small and medium businesses are struggling right now across the GTA. I know the City of Toronto is worried about the downtown core, main streets. So it is a multi-layered strategy that's needed. Government investment, we need to support businesses to stabilize and thrive because these are the entry points for many of those young people. Mind you, Brett, I do remember 40 years ago or so Brian Mulrooney campaigning for office on a slogan of the best social program is a job. Is that still the case in your view?

That's absolutely the case in terms of personal satisfaction, making a contribution to one's own well-being in society, and in terms of people's ability to consume, spend, and invest in themselves. We know that the biggest determinant of all of those things is whether they have gainful employment. And ensuring that they do, I think, is a responsibility, not just of government policy makers and NGOs and organizations working in this space, but it needs to be a priority for business, that they are tightly aligned with those organizations and businesses

that are doing work to build skills, create smoother paths for transition into the workplace, and retain and develop people. Because as Farah mentioned, one of our biggest problems is that we get diverse parts of the workforce into big institutions and companies but they tend to leave at the mid-level rank and so we still have both a pipeline issue and a retention issue. Farah in our last minute here I want you to give people a sense of what kind of future are we looking for, or looking to rather, if we don't get this right. Well, it's pretty dire. Young people, as we know, will have mental health issues.

They'll start to lose interest and trust in institutions, which is a bigger issue. Corporations will not have the skills that they need. That's a really big issue. How are we going to be productive and competitive? Government will find that they're not getting the revenues that they need to have. This report showed it was a $5 billion loss over the next 10 years. So for me, we have a young person problem. We have a corporation problem. We have a government problem. All those things add up to not the kind of Canada I think we want. And that's what's jarring. If this report doesn't wake people up to doing something then we really need to take a closer look at ourselves.

I guess I would remind people in their 40s, 50s, 60s that if they want their pensions to be there for them we've got to make sure this generation is employed because they're the ones who are going to be making pension contributions that are going to keep the system afloat. So, where can people read this report if they want to? It's on our website, King's Trust.ca. It's front and centre and welcome any comments, anyone who wants to work with us. The door's open. Good stuff.

I want to thank the three of you for coming on to TVO tonight and having a very important and timely discussion. Farah Mohammed, the King's Trust Canada, Nation Chung, VP, Community Impact, United Way Greater Toronto, Brett House on the line from New York City Columbia Business School. Thanks so much everybody. Thank you. Thank you.