With the new year in full swing it's time to assess whether the job prospects of young people are set to improve. This post is going to examine the current economic realities, analyze what's behind the trends and explore what might be in store for the youth labour market in 2012.
Early indications for 2012 aren't particularly encouraging with TD Economics and Scotia Capital predicting GDP growth rates between 1.7% and 1.9%, these are sharply lower than Minister of Finance Jim Flaherty's prediction of 2.2% contained in the fall economic update. The pressure on the Canadian economy is being driven by continuing economic uncertainty in Europe arising from the sovereign debt crisis and a weak American recovery in the wake of the 2008 financial crisis. These pressures will continue to put a damper on private sector hiring and when combined with government austerity programs, which will reduce public sector hiring, the youth labour market doesn't appear to be in for a rebound this year.
The economy isn't entirely to blame for the current situation though. Deeper structural factors are driving youth unemployment in Canada, such as the absence of mandatory retirement, older workers wanting to beef up their portfolios in the wake of the recession, the severe shortage of entry level positions, the impact from globalization and the growth of precarious employment characterized by contract positions and internships. These trends related to the labour market, economics and demographics aren't good news for young people in the short term as they point to continuing depressed job market; however, if you jump forward a few years to 2015 the labour market will begin to improve as boomers begin to exit the workforce in greater numbers.
The current situation should be assessed for what it is: a serious threat to the long term economic prospects of the current generation. There's a lost generation being developed in Canada as life's milestones get pushed further back, economic scarring occurs and the impact from years of precarious employment takes hold. Although this situation could be addressed through a variety of policy or regulatory responses, none have been forthcoming over the past four years.
The youth labour market continues to deteriorate with young people left to fend for themselves amid a poor economy and with a the social safety net that's predicated on assisting those who once had full employment (i.e. EI, Second Career) or older persons who receive income supplements (i.e. CPP, OAS). There's a complete absence of intergenerational equity within Canadian society at present as young people are taxed through high tuition fees and interest on student loans or face exploitation in the labour market via unpaid internships, dead-end service industry jobs or revolving-door contract positions. This is patently unfair situation with the baby boomers gaining enormous wealth at the expense of the generations coming after it.