‘Economic scarring’: What’s at risk as youth unemployment soars – National

A concerning trend in the Canadian labour market is the slow cooling combined with a surge in youth unemployment, which experts warn could have long-lasting negative effects on the youngest workers.

Statistics Canada’s June labour force survey revealed that the unemployment rate for youth aged 15-24 increased to 13.5 per cent, significantly higher than the overall population’s rate of 6.4 per cent. This is the highest level since September 2014, excluding the temporary spike during the COVID-19 pandemic.

The challenging economic conditions are particularly impacting students seeking summer jobs. The unemployment rate among students between semesters is at its highest level since 1998, with less than half (46.8 per cent) of them finding employment this summer.

Brendon Bernard, a senior economist at job search site Indeed, explains that two factors are working against youth in the Canadian labour market, making it difficult for them to secure employment.

The primary challenge facing today’s youth is the overall slowdown in Canada’s economy, influenced by higher borrowing costs and reduced consumer spending, leading to a decrease in hiring by businesses.

Bernard points out that job postings on Indeed are slightly below pre-pandemic levels, marking a significant shift from when employers were struggling to find enough workers during the pandemic recovery. With fewer job opportunities available, more workers are competing for limited positions.

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Halifax’s population continues to grow

A recent note from BMO senior economist Robert Kavcic highlighted that while youth employment has increased by approximately 25,000 positions in the past year, the expansion of the labour force in that age group by 100,000 people has driven up the unemployment rate.

The increasing number of young workers vying for limited job opportunities has created a “gridlock in the job market,” according to Bernard.

Ilona Dougherty, the managing director of the University of Waterloo’s Youth and Innovation Project, reports receiving numerous stories from students who have applied to hundreds of jobs without receiving any responses.

The difficulty of entering the labour market not only impacts youth in the short term but can also hinder their career development in the long run, leading to what Dougherty describes as “economic scarring.” This term refers to the feeling that despite their efforts, workers are unable to progress and may miss out on milestones like homeownership or starting a family.

“This is not just a temporary issue for this summer, and young people will overcome it,” she explains. “It’s the feeling… that you started off on the wrong foot and may never catch up.”

Bernard agrees that a sluggish youth job market can have lasting consequences for the current generation entering the workforce.

While government plans to limit the influx of temporary workers and students into Canada could alleviate competition in the future, Bernard warns that the speed at which employers will increase hiring once the economy improves remains uncertain.

“It will take time for people to regain momentum in their careers,” Bernard notes.

Dougherty expresses frustration at seeing young workers putting in effort in their job search but facing repeated rejections. She emphasizes that the challenging job market is due to external factors and not a reflection of individual capabilities.

Mike Shekhtman, regional director at recruitment firm Robert Half in Vancouver, points out that certain industries and regions still have demand for workers, such as healthcare and food manufacturing.

However, given the overall slowdown in hiring, companies expanding their workforce are more cautious with each hire, leading to longer hiring processes.

Shekhtman advises young workers to be patient and consider the long-term implications of their career choices. While economic pressures may push them to accept immediate opportunities, he stresses the importance of building a sustainable career over time.

“A career spans decades, and it’s crucial not to rush,” he adds.

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Canada’s unemployment rate rose to 6.4% in June: StatCan

For students struggling to gain work experience, Shekhtman recommends pursuing further education and training, particularly in soft skills like communication, to enhance their resumes.

When traditional employment opportunities are scarce, volunteering can serve as a valuable entry point into the job market, providing experience and networking opportunities that could lead to permanent positions.

In a slow labour market, persistence can be draining, especially after multiple rejections. Shekhtman suggests utilizing generative artificial intelligence tools to streamline the job application process and make it more efficient.

While some may fear the impact of AI on job security, Shekhtman encourages young workers to embrace technology as a tool to prepare for interviews and stand out from the competition.

“The better you can articulate your strengths, the more you can differentiate yourself and outshine your competitors,” he advises.

— with files from Global News’s Anne Gaviola

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