Youth unemployment continues being an extremely stubborn problem in Canada and it has been back in the news since the release of Statistics Canada's latest Labour Force Survey for August 2012 showing a depressed youth labour market. This blog post is going to examine the latest statistics, ask some tough questions, and give some perspective about the ongoing problems that young people face.
Where Do We Stand?
In August 2012 the Canadian economy created 34,000 jobs. Overall, 46,700 part-time jobs were created, but this was offset by a loss of 12,500 full-time jobs. The unemployment rate remained unchanged at 7.3% and the participation rate of 79.6% is at the highest level since August 2010.
Total employment among workers aged 15 to 24 stands at the lowest level since 2002 - this essentially means that the number of real jobs for young workers has returned to the level it was a decade ago. The 15 to 24 year old cohort loss 20,000 full-time jobs in August and was the group that bore the brunt of the job losses.
Currently, the youth unemployment rate stands at 14.8% (representing a jump of 0.5%) and the total number of jobs that young people hold has fallen by 72,000 compared to a year prior. Full time students faced the worst summer labour market in years with the employment rate standing at only 47.9%; this is lower than the past couple years and far lower than the average of 54.1% in the three years leading up to the crash.
Are the Statistics Canada Numbers Even Accurate?
The numbers that are thrown around in the media often don't give the full picture. The real unemployment rate for youth in Canada is probably above 20% given the recent spike in the youth unemployment rate. Even the Statistics Canada numbers are suspect as the data collection techniques fail to capture the fastest growing segment of the youth labour market: unpaid internships. It's difficult to assess to true picture out there (or craft policy responses) when tens of thousands of misclassified employees are excluded from official statistics. On this point, Ross Eisenbrey of the Economic Policy Institute wrote a short missive about this problem in the U.S. context.
Where's the Response From Government?
Curiously, the Federal Government has committed fifty million dollars to create 3,000 new jobs for young people in Canada. While this is encouraging, it's a departure of sorts and flies in the face of their explicit anti-middle class, anti-worker strategy that's aimed at eroding organized labour, driving down wages, and decimating what remains of the social safety net. When this move is contrasted with the elimination of the student summer jobs centres early this year it's clear that the Harper regime lacks any semblance of a coordinated youth jobs strategy; however, to be fair though provincial governments, such as Ontario, also lack a coordinated approach to youth unemployment.
What Will Happen Going Forward?
The youth labour market will continue to be weak as the economy waits for external signs coming from Europe and to a lesser extent China. Overall, there seems to be a modest recovery in process in Canada and the United States in terms of jobs, but the growth isn't nearly enough to reduce the unemployment rate or get the long-term unemployed back into jobs. Essentially, there's a lot of uncertainty in the wider economy and this will continue to dampen prospects for a stronger recovery in the youth labour market.