A new report is warning youth unemployment has reached a “troubling” high, hitting a level not seen since 2012, and it could cost the Canadian economy billions in the next decade.
The report by Deloitte, commissioned by The King’s Trust Canada, a national youth charity founded by King Charles III when he was Prince of Wales, noted youth unemployment hit 14.5 per cent in August — the highest since 2012.
Failure to address the issue could cost the country $18.5 billion in real GDP growth by 2024, it found.
“The report is troubling on several levels,” Farah Mohamed, CEO of the King’s Trust Canada, said in an interview. “What it comes down to is I think we really have to understand that if we do not invest in young people, if we do not create pathways to employment, how is this country going to be competitive, how are we going to be productive?”
According to Mohamed, citing the report, if action isn’t taken on youth unemployment, the government could lose out on $5.3 billion in net revenue in the course of the next 10 years.
This age group also sees unemployment at a much higher level, with the 14.5 per cent seen in August double the 6.6 per cent for the general working-age population that same month.
Timothy Lang, president and CEO of Youth Employment Services YES in Toronto, told Global News in the more than 50 years of his organization this has rarely changed and there are factors behind it.
“Youth unemployment is always double or triple, partially because of stiffer competition with adults who hold jobs,” he said. “Sometimes the young people aren’t even aware of what to look for or they need to reskill.”
The report also cautioned inaction to address the issue of unemployment can have consequences, including deteriorating mental health and even engagement in criminal activity.
Mohamed said having employment gives people a sense of connection to community.
“If you do not have a ‘get up in the morning and go somewhere’ opportunity and that is consistent, that is going to affect how you are confident or not confident, how you present yourself, are you part of society,” she said.
“If you get a young person, you put them into the workplace they’re going to be engaged in something ,they’re going to feel good about their work.”
Can youth unemployment be fixed?
Addressing the issue of youth unemployment could see multiple benefits, the report said.
Mohamed said Canada could also see the creation of 228,000 jobs, an increase of $9.2 billion in greater wages and salaries, and the same amount in government revenue lost becoming a gain.
“The right conditions are that we are utilizing young people at their full potential, so they have full-time jobs, they’re meaningful work and … we pay them properly,” she said.
“There are a number of sectors that are worried about people aging out. A perfect condition would be that you have a pipeline of people going in.”
In order to do this, the report suggests collaboration between governments, businesses and non-government organizations is needed, including policies that ensure proper education and skills development for youth, and employment and entrepreneurial support.
“If we’re saying three years experience and we’re not willing to give them experience, then you’ve created a barrier they can’t get over,” Mohamed said.
There is no quick fix to the issue of youth unemployment, but Lang says tackling the issue now can lead to a “payoff” in the end.
“When you invest a little bit now, the amount that it pays off into the future, which may be hard to track … but over a decade or two decades, it definitely leads to a more productive and even a happier and healthier society,” Lang said.