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The Threat of Youth Unemployment

A girl contemplates youth unemployment

George Bernard Shaw famously said, “Youth is a wonderful thing. What a crime to waste it on children.” Today, Shaw would have little reason for such a lament as the real crime appears to be what young people (ages 15 to 24) must endure just to grow up. From 1997 to 2007, youth unemployment around the world grew at less than 100,000 individuals per year. But between 2008 and 2009 alone, that number exploded to 4.5 million thanks to the onset of the Great Recession. Currently, estimates suggest there are over 75 million unemployed young people worldwide.

Canada’s youth unemployment

In Canada, youth unemployment is currently around 14%, which is roughly double the country’s overall unemployment rate. That’s three percentage points higher than it was before the Great Recession began, back when the rate was 11.1% – its lowest since 1982. However, that 3% climb, amounts to about 215,000 jobs, and Canada’s NEET factor, which accounts for young people who are not employed, in education, or in training, sits at a million.

Many argue that the current unemployment rate for youth is nothing to worry about, especially when you consider that it was above 17% during the recession of the early 1990s and above 19% during the recession of the early 1980s. Still, it’s important to remember that an official unemployment rate is often skewed to look more positive than it actually is because it doesn’t take into account those who have given up looking for work or those whose employment insurance has run out. Such rates also consider those in low-paying, part-time, and fleeting temporary jobs “employed”, even though what many of those workers want – and in many cases need – are jobs that are well-paying, full-time, and stable. Besides, what worries most experts isn’t the 14% unemployment rate itself, but what it looks like in relation to other factors.

Youth unemployment and underemployment

One such factor is the Baby Boomers. After the crash, many had their jobs eliminated, forcing them to scoop up positions that would normally have gone to younger workers. On top of that, Boomers are living longer and putting off retirement. These developments are pinning the Millennial Generation against highly experienced workers in a David-and-Goliath scenario – only this time, Goliath’s winning. The resulting lack of opportunities is, in addition to keeping some out of the workforce altogether, pushing young people, especially college and university graduates, into jobs that are beneath their skill levels. Underemployment, as it’s called, can be just as damaging for youth as unemployment.

Since having a degree is now a prerequisite for even the most menial white collar job, many new grads forced into unemployment and underemployment are in danger of suffering “wage scarring”. Statistically, the longer youth unemployment or underemployment persists during a time when young people should be entering into full-time, permanent positions, the more likely that cohort will languish in low-skilled jobs earning lower than expected wages, unable to demonstrate their expertise in their chosen fields and struggling to pay off their student debt – an expense that’s become more burdensome with every new cohort. What’s more is that, historically, after an economy recovers, employers are more likely to hire those coming out of college and university at that particular period, which even further marginalizes those who quite literally graduated at the wrong time.

The consequences of youth unemployment

Such disenfranchisement of an entire generation leads to a host of economic and social problems. Lower incomes mean lower tax revenue, especially when many may choose to migrate to other countries to find work. There’s also a well-established link between earning a decent income and maintaining decent health. The more people there are earning low wages, the less healthy those people will be, and ultimately, the more strain that will put on Canada’s healthcare system. Health doesn’t just concern physical ailments either. Marginalized groups suffer from more mental health problems as well, such as lower self-esteem, anxiety, and depression – and these feelings lead to social unrest, including an increase in crime.

What employers can do

All is not lost, however, and there are actions employers can take to help alleviate youth unemployment. The first is to give younger people, especially recent college and university graduates, a chance. While there is a lot of talk about how Canada’s new grads lack the specialized skills that Canada’s economy currently needs, such as engineering and technical skills, surveys stress employers’ desire for soft skills, such as teamwork, problem-solving, and leadership skills. And while very specialized areas do require very specialized skills, employers could do more to provide young workers with the skills they need to succeed. Fostering a corporate culture that allows for training is a great way for employers to retain talent and create succession plans that will help organizations avoid turnover costs and hiring crises. And it’s not as though this focus on training would be a radical change. In fact, investment in on-the-job training has declined 40% per worker in the past 20 years. Considering the long-term costs of not training employees, it’s time to turn that trend around.

Employers are only part of the answer, however. Governments and schools must also reexamine their policies in order to ensure that this country’s youth – literally, its future – is receiving the protection, guidance, and education they need to succeed.

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