Jobless Summer: Why Youth Unemployment Is Highest in a Decade
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Jobless Summer: Why Youth Unemployment Is Highest in a Decade

Youth unemployment rose to 13.5% in June, a level not seen since September 2014, excluding the pandemic

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The youth unemployment rate rose to 13.5 per cent last month, a level among Canadians aged 15 to 24 that hasn’t been seen since September 2014, not counting the pandemic.

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Youth unemployment has risen 2.1 per cent since June of last year. Brendon Bernard, an economist at Indeed Canada, says deteriorating business sentiment and a baby boom are driving the rise in unemployed young people.

“This is the result of an increase in the number of people coming from abroad,” he said. “At a time when employers’ appetite for hiring was waning, we now have an increase in the number of young people looking for work, and demand is not keeping up with supply.”

According to Statistics Canada, Canada welcomed 1.3 million new arrivals in 2023, and the population of people aged 15-24 increased by an estimated 335,700 people since June last year.

Tim Lang, president and CEO of Youth Employment Services, one of the country’s leading job placement organizations that helps young people aged 15 to 30 find work, says he has seen an increase in the number of young people seeking their services, including young newcomers who have recently arrived in Canada, which has led to an increase in demand for work.

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“A lot of these new Canadians are young people in their 20s and 30s, so there’s a lot more competition for existing jobs,” Lang said. “We know that in the long term, the increase in new Canadians can lead to more economic opportunities and new businesses, but in the short term, it certainly means more competition.”

The labor market tensions that emerged as the economy reopened after the pandemic have subsided.

Statistics Canada reported that job vacancies fell significantly in the first quarter of 2024 across a range of industries, with year-over-year declines in the following sectors: manufacturing and utilities (-35.3 per cent), sales and services (-33.7 per cent), natural resources and agriculture (-29.3 per cent), trade and transportation (-22.6 per cent), arts, culture and recreation (-24.2 per cent) and business and finance (-15.1 per cent).

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Bernard noted in his summer job openings report that the overall number of job openings in early May was down 23% from 2023 and 39% from 2022. Job openings are back to pre-pandemic levels, and in some cases below pre-pandemic levels. This can be attributed to companies coping with a sluggish economy and a gradual decline in the high-demand environment.

“Recruiting in general, job openings, is one of the most cyclical aspects of the economy,” Bernard said. “That will naturally affect people who are on the margins of the labor market in particular.”

Lang noted a third potential trend that could be contributing to youth unemployment: Employers are offering more part-time positions than full-time positions, with many of those positions going to older workers.

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“A lot of organizations are opting for part-time positions instead of full-time positions,” he said. “People with more experience are taking on second part-time jobs, which eliminates young people who are looking for their first job or summer jobs because employers are choosing to give them to people with more experience.”

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Bernard says the data is unclear, but suggests Canadian workers are staying in entry-level and part-time jobs much longer.

“We’re seeing Canadians not changing jobs as often as they used to,” he said. “That could be a sign that people in entry-level positions aren’t moving up as much as they used to.”

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