The Current - Tackling high youth unemployment in Canada

Episode Date: November 25, 2024

Finding a job is increasingly frustrating for young people in Canada, as youth unemployment hovers near a 10-year high. We look at what’s driving the problem, and how to turn it around.

In 2017, it felt like drugs were everywhere in the news, so I started a podcast called On Drugs. We covered a lot of ground over two seasons, but there are still so many more stories to tell. I'm Jeff Turner, and I'm back with Season 3 of On Drugs. And this time, it's going to get personal. I don't know who Sober Jeff is. I don't even know if I like that guy.

On Drugs is available now wherever you get your podcasts. This is a CBC Podcast. Hello, I'm Matt Galloway, and this is The Current Podcast. Please, Canada, please start hiring again. Do something. Please start hiring again. Do something. I can't keep spending all day on Indeed and all day handing out resumes and all day calling people

and all day emailing people for no response. A desperate plea on TikTok. It's a frustration shared by many young adults. According to a report by Deloitte and King's Trust Canada, youth unemployment in this country is at a 10-year high of 14.5%. More than 800,000 people under the age of 29 are unemployed. Why is it so hard to find a bloody job? I've been looking for three months

and I've had one interview out of all the places I've applied. I've had one interview and no, it didn't go anywhere. Like, what do I need? Like, do I need a PhD? Do I need, like, what more do I need when I'm applying for jobs and I'm fully qualified for and overqualified for? Jose Calderon can relate. He's 22 and a psychology student at the University of Toronto. He's been applying for retail and general labor jobs in between school semesters for four years and still can't find a job. When I used to do a lot of detailed resumes and cover letters, now it's just throwing stuff at the wall, seeing what sticks, like trying to send out two resumes a day. The typical experience is just seeing what jobs align with my experience

and then applying to them and then just not sharing anything back. Not even like all that that I didn't get the job or an interview either. And the radio silence from potential employers hasn't been easy to handle. I am a university student and everyone needs a job to get money to survive in Toronto. So I feel very demoralized, waiting for so long to get a job and just not hearing anything back. I'm joined now by two guests. Timothy Lang is the CEO of Youth Employment Services, or YES,

and Armin Jelnyzian is an economist and the Atkinson Fellow in the Future of Workers. Good morning to you both. Good morning. Good morning. Armin, if I can start with you, youth unemployment hovering around 14%. What does that rate tell you about the state of the economy right now? It sucks.

But it's also turning down from where it was just in the course of the summer. So it's starting to ease again, down to levels that we hope will be significant across the country and bring us back to levels that were actually historically low just before the pandemic hit. Tim, your agency works with these youth. What are the young people out there telling you right now? Yeah, I mean, we've been around since 1968, so we've seen everything, you know, the boom economies when unemployment is low and the bust, you know, recessions when it's high. So this is a bit troubling because we're not in a recession.

We know some of the reasons why it's high, but it's been difficult. We serve over 15,000 a year and partners right across the country. And, yeah, like some of your recorded messages. A lot of them are desperate. They come to us in desperation. Walk me through some of those reasons. What, what, what is happening that's driving this right now? Well, one of the big ones is Canada is always a great place for new Canadians. And obviously we know as economists will tell you, it's great for our economy. But we took a record number influx of, I think it was close to 1.1 million. And again, long term, that will likely help our economy and create more jobs.

But in the short term, that extra competitiveness was really difficult for a lot of young people because a lot of the new Canadians were between the ages of sort of 18 to 35. sort of, you know, 18 to 35. I mean, what's your sense of where this is coming from, with an eye towards what we can do about it? Well, I just want to double down on what Tim just said, because we are looking at record levels of business failures, most recently. And it's these small businesses that tend to hire younger people uh and some of the bigger ones uh like uh you know the chain retail stores or the chain fast food places are seeing falling volumes because higher interest rates have meant people are spending more on basics like groceries and um and uh rent rather than going out getting fast food.

So yes, adding, pouring all these available people that are dying to do anything for cheap labor was absolutely an issue, but that's been dialed back significantly. And we are left with the problem of business failures. In fact, the whole business ecosystem is kind of teetering around right now. One of the reasons why that Christmas gift giveaway was supported by small businesses is because they need people to come shopping in their stores. That's why it's called Black Friday. This is their chance at this point of the year to make, like basically to close the books, to be even. And unless these businesses

stay afloat, there will be fewer jobs for young people. Armin, you told me once years ago, a stat that has just sort of locked itself in my brain, that small and medium-sized businesses in Canada make up something like 70% of private sector employment. Do you think people actually understand the importance of those small and medium-sized businesses in keeping employment afloat across the country? I think they get it, but everybody's looking for the cheapest price possible. Everybody's living by the Zellers, you know, the lowest price is the law rule. And look where that got Zellers. Fair enough. Tim, typically what what kind of jobs are we seeing offered to youth i mean there's a whole range obviously but i mean a lot of the entry

level positions are still sometimes their first job in hospitality or retail and you know added to the the influx and competition um the federal government made, I think, a slight error in allowing temporary foreign workers to take those jobs. Normally, temporary foreign workers are needed in areas like agriculture or certain manufacturing where Canadians just won't do those jobs. But they opened it up to hospitality and retail because they were lobbied after COVID because there was demand. But I think that was a mistake, and that shut the door on a lot of, a lot of youth. Tim, I had an electrician by the house the other day to, to fix an outlet. And, and I was getting to talk to him about, he, he did a program to start his

training right in high school, got work almost immediately out of high school, has finished now his apprenticeship, he's making really good money. And it made me wonder then why there aren't more good paying jobs that allow young people to save for home ownership, plan for their future. Where are those jobs and what do we need to do to get these kids back into those? Yeah, I mean, it's a great question. And your example is a great one because you look at the best countries in the world with the lowest youth unemployment, like Germany, and they have programs embedded in their educational system where they have apprenticeship programs. And in Ontario, I know the Ford government's starting to do that. And I think long-term,

that will be helpful because there's still lots of jobs in the trades and they're high-paying jobs. But certainly, looking at other areas like reskilling, like even at YES, our organization, we do programs in cloud computing or cybersecurity, you know, areas where we know that there's employment. So it's certainly looking at areas where there are jobs or jobs of the future and making sure that we've got training available. One of the things that we talked about leading up to this is that, you know, it's such a broad age range that like officially, technically, I think it's a 15 to 24 age group. But, you know, when we talk about youth unemployment, I think people go all the way up to like 35, well into their 30s.

Armin, how important is it to solve this? Like, are we talking about actual lost revenue? What are the stakes of getting this wrong? Oh, it's so huge, actually. But, you know, I was looking at the difference between Ontario and Canada youth unemployment and using the definition of 15 to 24-year-olds. We are seeing definitely lower rates of unemployment in both jurisdictions than historically, as a peak, and we're much lower than the peak. But what's changing is the relationship between young people and everybody else. And there's two aspects of the

comment that I want to make. First of all, we have never needed young people to integrate in the labor market to get in and stay in the labor market more than we do now. In the last 50, 60 years of data, you take a look at what's going on and never have we seen so many people reaching the age of retirement and are about to, and we have fewer young people coming into the labor market. So we want those young people to get in, stay in, have a good experience, because we saw the scarring from when about a quarter of young people, young men, were unemployed in the 80s and the 90s recessions. And to Tim's point, this isn't recessionary. So here's my second point. It isn't recessionary. Demographics hands to us on a silver platter the opportunity to make every job a good job. And if we do that, we actually improve the economy from the bottom up. If we don't do that, young people don't get jobs.

They don't get good jobs. We're asking the next generation to do the most heavy lifting since the 1950s and 60s. It's the smallest working age cohort we have seen in more than half a century. And we're asking them to take care of themselves and pay the taxes for those who are too old, too young, and too sick to work. It's a diabolically bad situation if we don't get these people into good paying jobs that can help them deal with the cost of housing. I mean, your previous segment about housing costs in Nova Scotia was mind blowing. So we need to people need to make money to be able to live anywhere. In 2017, it felt like drugs were everywhere in the news.

So I started a podcast called On Drugs. like drugs were everywhere in the news. So I started a podcast called On Drugs. We covered a lot of ground over two seasons, but there are still so many more stories to tell. I'm Jeff Turner, and I'm back with season three of On Drugs. And this time, it's going to get personal. I don't know who Sober Jeff is.

I don't even know if I like that guy. On Drugs is available now wherever you get your podcasts. So let's pivot to what we need to do to fix this. Tim, the federal liberal government is making some moves to change immigration levels. How much of a difference do we think that's going to make? Hard to say. I mean, as we know, you know, the influx was dramatic and sudden. So, I mean, I think if it goes back to normal levels, I think that that will help. So, but there are other things that can be done. And I mean, as Ernie said, you know, just hit the nail on the head that the scarring, which is the term that's now used, you know, can cost, as the Deloitte King's Trust report said,

and as the CEO Farrah Muhammad had pointed out, can cost up to $18 billion to the economy in long term. So we've got to do something. So that's where government can play a role. We know that Canada is a great country, and part of that, there are many reasons for it. Part of it is our social system like universal health care. But there's another layer, and that's organizations like ours, yes, and those across the country. They're free.

And in our organization, we provide almost 90% success rate of getting someone a job. So obviously we encourage all youth to reach out those free resources. But they are largely funded by governments, so we need governments to make sure they continue that funding. And provincial governments in BC and Ontario have continued to do that. We've seen a bit of a cutback by the federal government, unfortunately. I mean, our organization, our federal funding was cut almost 75%, so we need them to maintain that because we also know that for every dollar of funding,

it returns at least three to the economy in terms of tax revenues, wages, reduction on social services, and so much more. Armin, I've been trying to get my head around sort of what the main issue is here. And you've highlighted them here. There's the immigration problem, there's a job creation problem, there's a demographics problem. Are they all intermingled? Or is there something central to our issue that we can start by trying to tackle? I mean, I think to Tim's point, we know what programs work. To defund them is cuckoo. Absolutely nuts.

So to actually, because as I said, we had this problem in the early 80s. We had this problem in the early 90s, much bigger than it is now. Thanks to demographics, I know it hurts. It probably hurts more for the people that don't have a job because they can't cover their cost of living in a way that was not the issue back then. But we do know what works in terms of public policies. What I will flag, though, is we have no idea what's going to happen in the coming months. We ducked a recession, partly because we added people and stirred. Partly, everything that we've been complaining about, newcomers coming here, prevented us from going into a recession post-pandemic reopening. And the reason was, employers really couldn't

get enough people to do the jobs that people wanted to get services for. And it was very service driven. Now we are looking at the results of the US election that I think could really upset the apple cart on both sides of the border. And historically, some of the really good jobs have not just been in trades, they've been in manufacturing, especially for young men. And that is an area that is extremely exposed to really not so public policy coming from south of the border and blowing our way. You know, Tim, I think about when I was, I went to university in Nova Scotia, I'd plant trees out West or I'd go work in BAM for whatever it may be.

And it felt like I could go anywhere and get a job. It was easy. And it, it, it, it allowed me a certain amount of mobility and, and freedom to go make some decisions. I wonder how you think about the sort of,

sort of social knock-on effects when, when the young people can't find work. It's, it's hard on them, isn't it? It is. And, you know,

like you went to university of Nova Scotia, even though I'm from Western Canada, but when I graduated, it was easier to find, as you say, tree planting and things like that. But it was actually a difficult time in the early 90s to find full-time work as well. And we're seeing some of that again. And that's why it's so important for corporations to step up. A lot of times they think they're saving a bit of that, again, and that's why it's so important for corporations to step up.

A lot of times they think they're saving a bit of money by offering part-time, save on their benefits. But we work with, again, thousands of businesses as well, trying to encourage them the benefits of hiring full-time because there's a cost to churn and labor and productivity. But the other big thing is we work a lot with youth with mental health and mental health disabilities are on the increase. So anyone who doesn't get a job, that can cause anyone's mental health to rise. But someone who's got a diagnosed mental health disability, having employment helps their sense of worth and dignity, has a sense of purpose, of community.

But the data also shows that employers that hire people with a mental health disability, even though some small accommodations, they end up being some of the most productive long-term employees. So, again, all these things, if we don't act with mental health on the increase, it's just going to be compounded significantly. Armin, we've been doing a lot of reporting over the last number of years about the amount of young people who are living with their parents for longer. How much data do we have and how direct of a line can we paint between youth unemployment and a strain on their parents' generation?

It's very difficult to do. I mean, the source of that data is the General Household Survey, which we don't do very often, or the census. And the last time we checked to see who's living at home with mommy and daddy is 2021. The census is run every five years in the ones and the sixes of the decades. And's when we learned that more men young men lived at home with mommy and daddy still uh then women uh and uh fewer of these men had had any kind of a relationship uh with anybody uh other than because you know they're living living at home. Now, the problem with that was it's 2021 in the heart of the pandemic. But the concern is that housing costs have been rising so steeply,

particularly continuing to rise in many places for rent, though in some places they're starting to come down. Rents are starting to come down, rents are starting to come down. We'll see what that's like in 2026, which isn't very satisfying because we won't find out until a couple of years later. Look, we don't need the data to know people are in trouble. This doesn't need to be evidence, like data-driven. We can see it all around us. And the two clips that you had at the top of this segment

are ample indication that people with qualifications, people willing and eager to work, people that are looking for some way to participate in their lives and in society are going begging for the opportunity. That never is good news. And when you compound that with what is happening politically, we might be in for a really troubling time. On the other hand, demographics literally does hand us opportunities left, right, and center for the next generation. And if we seize that opportunity, we will be actually growing the economy from the bottom up and from the middle out, which is the secret sauce to any kind of economic and social success over the long run. That's Armin's path forward and way out of this. Tim, what's yours?

If you could get one thing moving, what would it be? Well, like how Armin said, the secret sauce. And I think there's a lot of truth to that. There is great opportunity. So again, if making sure we invest in organizations that provide these free services, if businesses are more aware of the benefits of hiring young people full-time and people with mental health disabilities, it helps their bottom line. And just, you know, making sure there's more awareness, I think great things can come and we'll all benefit. All right.

Listen, important conversation. I'm really glad to have had it with you both. Thanks for this. Thank you very much. Thank you. Timothy Lang is the CEO of Youth Employment Services, also short for YES, and Armin Jönsjön is an economist

and the Atkinson Fellow on the Future of Workers. For more CBC Podcasts, go to cbc.ca slash podcasts.