A relatively slow cooling in the overall Canadian labour market combined with surging levels of unemployment among Canada’s youth is a trend that experts say could leave the country’s youngest workers with “economic scarring.”
Statistics Canada’s June labour force survey, released last week, shows the unemployment rate for youth aged 15-24 rose nearly a full percentage point to 13.5 per cent in the month, more than double the rate of 6.4 per cent for the overall population. That’s the highest level since September 2014, excluding the temporary jump during the COVID-19 pandemic.
Rough economic conditions are especially affecting students during what should be the busy summer job season. The rate of unemployment among students between semesters at school is at its highest level since 1998, StatCan said, as less than half (46.8 per cent) of this cohort found jobs this summer.
Brendon Bernard, senior economist at job search site Indeed, tells Global News that two forces are conspiring simultaneously in Canada’s labour market, “and they’re not in favour of youth finding work.”
Why is youth unemployment on the rise?
The first obstacle for today’s youth is the general slowing in Canada’s economy, tied to higher borrowing costs and slowing consumer spending, which is suppressing hiring appetite in businesses.
Bernard says that the levels of job postings on Indeed are now slightly below where they were before the COVID-19 pandemic. That’s a “pretty sudden” shift from even 18 months ago when employers were still struggling to find enough labour to meet demand during the pandemic recovery, he notes. As the well of open jobs dries up, a growing number of workers are competing for the few open positions.
A note from BMO senior economist Robert Kavcic earlier this week noted that youth employment has in fact grown by roughly 25,000 positions over the past year, but the size of the labour force in that age range ballooned by 100,000 people, driving up the unemployment rate.
More and more young workers competing for fewer and fewer positions has led to a “gridlock in the job market,” Bernard explains.
Ilona Dougherty is the managing director of the University of Waterloo’s Youth and Innovation Project. She tells Global News that she is inundated with stories from students sending out hundreds of applications and getting no response.
Difficulty breaking into the labour market doesn’t just affect youth in the short-term, but can stunt the development of their career in the future, Dougherty explains. She calls the phenomenon “economic scarring,” the feeling that workers can never get ahead no matter how hard they push and may miss out on key milestones like owning a home or starting families.
“This is not just a one-time thing that’s relevant for this summer, and young people will get over it,” she says. “It’s the sense … that you started off on the wrong foot and that you’re never going to be able to make up that distance.”
Bernard agrees that a slow youth job market can have a lasting impact on the generation entering today’s job market.
While plans from the federal government to slow the pace of temporary workers and students coming into Canada could help to ease competition in the years ahead, he cautions that it remains to be seen how quickly employers will ramp up their appetites for new hires once the economy shows signs of turning a corner.
“It’ll take a while for people to finally catch up on their career ladders,” Bernard says.
Dougherty says it’s frustrating to see young workers “doing everything right” in their job hunts but coming up short time after time.
“Unfortunately, it’s really tough out there,” she says. “It’s not you. It’s the situation.”
How can young workers stand out?
Mike Shekhtman, regional director at recruitment firm Robert Half in Vancouver, says there are still some industries and pockets of the country where hiring demand persists. He names healthcare and food manufacturing as a few sectors where youth can still find job prospects.
But he says that with the general slowdown in hiring among employers, those businesses who are still expanding their payrolls are being “more careful” about every hire. That can lead to longer hiring timelines for workers.
Shekhtman says young workers will have to be “patient” at times.
Economic realities might put pressure on young Canadians to take the first opportunity presented to them, but he says the “long-term play” is critical too in building a lifelong career.
“A career can span over decades, and it’s important not to feel like you’re rushing,” he says.
For students struggling to land their first job experience, Shekhtman urges them not to eschew time-worn advice such as getting more education and training — particularly in soft skills like communication — to pad out a thin resume.
When employers aren’t hiring, volunteering can mark a solid half-step into the labour market, he adds. Not only will that build out experience on a resume, but it can connect young workers to a community and set up connections that can lead to full-time work.
Being persistent can be exhausting in a slow labour market, Shekhtman concedes, after applying to dozens of positions and getting nowhere. He encourages workers to spend time leveraging generative artificial intelligence tools that can help put creative spins on resumes and cover letters to save time and make the job application process more “efficient.”
Some Canadians may be “fearful” of AI as something that can take their jobs, but Shekhtman recommends young workers lean into the latest tech as a way to prepare for interview questions. When competing against other youth who haven’t been through the interview process multiple times over their career, getting a clearer expectation of how to separate yourself can only help to secure the job offer, he argues.
“The better you are in articulating that piece, the more you can stand out and beat on your competition.”
— with files from Global News’s Anne Gaviola