Young Canadians are struggling to find work, with statistics showing fewer youths were employed in May than they were at the height of the Great Recession.
Unemployment among Canadian youth spiked significantly this year, bringing the rate of increase just under that of the 2008-2009 recession and leaving the employment rate worse than at any point during that time.
The authors of a Frasier Institute study want government policymakers and economists to be alert about the potentially disastrous effects of the growing number of young Canadians who are “not attached to the labour market.”
The number of young Canadians who are willing and able to work but can not find employment is on the rise.
Researchers found that the employment rate of youth aged 15-24 in May was 55.6%, the lowest annual figure for any year during the 2008–09 financial crisis.
During the crash, the employment rate for that age group dropped by 4.5% from a high of 60.5 to a low of 56%.
The study found that between January 2023 and 2024, the employment rate for Canadian youth dropped by 3.8%, a “slightly smaller” decline than that seen during the 2008-09 recession.
“The decline in employment has been far greater for young Canadians,” the study said.
It said that the youth employment rate for May 2024 was “lower than the annual rate in any recent year,” aside from the COVID-19 lockdowns and recession when many industries that typically employ Canadian youth workers were shut down for months.
For Canadians aged 15–19, the employment rate has decreased from 45.5% to 40.4% over the last 17 months, while in the 20–24 year-old range, it had fallen from 71.5% to 68.5%
From January 2023 to May 2024, the youth unemployment rate increased from 9.7% to 12.6%, dropping by 2.9%. In comparison, during the 2008-2009 recession, youth unemployment increased by 4.1%.
Using information from StatsCanada, the report found that the average number of hours that today’s Canadian youth are working has decreased by 16.3% compared with those in the same age range in 1989.
The average young Canadian worked 30.7 hours per week in 2023, compared to 25.7 hours in 2023. This indicates that the typical level of attachment of Canadian youth to the workforce has fallen.
“If governments want to avoid the possible lasting harms from the recent spike in Canada’s youth unemployment rate, they should help improve the labour market environment for young Canadians,” Ben Eisen, a senior fellow at the Frasier Institute and co-author of the study said about the study.
“These trends are concerning and should be the subject of additional monitoring and research going forward.”
The study stated that leaving a willing and able-to-work young population without jobs could have lasting negative consequences for the Canadian economy.
“When young people obtain experience in the workforce, it can have lifelong positive effects. Conversely, when young people have little work experience, it can negatively affect their employment prospects and wages in adulthood,” the report said.
The authors called on economists and governments to pay “careful attention” to the potential “scarring” effects that the “substantial” spike in youth unemployment over the past 17 months might have on the Canadian economy.
“Extensive evidence shows that delayed and weak attachment to the workforce for young Canadians, both in the short- and long-term trends, can create lifelong scarring on labour market outcomes.”