The economic reality for young Canadians today is very different than that of previous generations, said CIBC deputy chief economist Benjamin Tal, the report's author.
"They are basically on the sidelines doing nothing," he said in an interview. "They will not be able to penetrate this very competitive labour market."
In a market where previous experience is essential, youth aren't able to find the summer jobs and part-time work required to build a resume, Tal said.
"Now, while more education is positive, increasingly, students are completing their education without any work experience and are more likely to be caught in the no job–no experience, and no experience–no job cycle," he said in the report.
One in five unemployed youth, aged 15 to 24, has never held a job, Tal found. That's 40 per cent higher than the long-term average and close to the record high of the 1990s.
"The current environment of part-time work, temporary jobs, corporate and government restructuring and downsizing is especially tough on young people whose lack of experience and seniority make them much more vulnerable to labour market changes," Tal said in the report.
Youth are more educated than ever before. While the percentage of youth aged 15 to 19 who are enrolled in school is relatively static, students seem to be in school longer. Enrolment rates in the 20- to 24-year-old age group are rapidly increasing, with 44 per cent currently in school, the report found.
Policy-makers need to create options in which education and work-related training are combined, Tal said. This would allow youth to find jobs while in school and close the learning gap that exists when students transition into the work world.
A university degree in any subject is no longer enough, he said. Instead, youth need to choose disciplines that offer practical experience and long-term employment opportunities. Taking advanced courses and networking with people are two ways that high school students can distinguish themselves.
The youth unemployment rate is more than double the unemployment rate for Canadians aged 25 and older — a record-high ratio that needs to be addressed, Tal said.
"For Canada's economy to grow and our standard of living to remain high, this is an imperative," he said in the report.
The Canadian education system must find ways to incorporate skills that enhance students' employability directly into the curriculum, Tal said.
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Ligaya, A. (2013). Financial Post.
The youth unemployment rate in 2012 was 2.4 times that of adults — marking the biggest gap since 1977, the report released Tuesday suggested.
“Part of what you’re seeing is a slow recovery from the last recession,” said Jim MacGee, associate professor of economics at the University of Western Ontario. “It really hits the creation of new jobs. And the groups that are going to be impacted the most by those types of events are always those people who are new to the labour market, and that’s going to be disproportionately younger workers.”
Another contributor to the widening gap between youth and adult unemployment rates is more younger people opting out of the workforce in their early 20s to pursue higher education than they did 30 years ago, he said. Meanwhile, Mr. MacGee said, young people today who choose to enter the workforce without formal training face more job hurdles than their predecessors.
“The set of people who choose not to go on to education … on average are going to have a much harder time in the labour force,” he said.
André Bernard, of Statistics Canada’s analytical studies branch, said Generation “Y” workers — those between the ages of 15 and 24 — are twice as likely than adults to be laid off.
Last year, the youth unemployment rate in Canada was 14.3%, compared with 6.0% for both workers between the ages of 25 and 54 and those 55 and older, Statistics Canada says.
The gap between youth and adult unemployment rates has long been a problem in many countries. In 2011, the average youth employment rate across OECD countries was 16.2%, with Switzerland faring the best at 7.7%. Among G7 countries, the largest gaps between youth and adult unemployment rates were in Italy, the U.K. and France.
Historically, labour force participation by young people is lower than that of adults because many go to school, Statistics Canada said.
But, as employment rates among young people continue to lag and the growing burden of student debt reaches an average of $28,000, difficulties are mounting for the next generation of workers.
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