Canada's jobless youth: Think-tank pushes plan to create 186,000 'guaranteed' positions
Jesse Tahirali, CTVNews.ca
Published Sunday, June 22, 2014 10:00PM EDT
Last Updated Monday, June 23, 2014 2:37PM EDT
With youth unemployment well above the national average, exams might not be the only thing keeping young Canadians up at night.
But one think-tank wants to ease the extracurricular stress students face by trying to guarantee availability of 186,000 jobs for those making the transition from backpack to briefcase.
The Broadbent Institute has a plan it says will level the playing field for the one in eight young Canadians out of work.
In a report released Monday, the Ottawa- based institute lays out the steps it’d like to see taken toward what they call a “youth job guarantee.”
“Canada has a youth jobs crisis at the moment,” Rick Smith, the executive director of the Broadbent Institute, told CTV News. “It’s time for the federal government and Canadian businesses to roll up their sleeves and solve this very significant problem for our economy.”
The number of jobless young people in Canada is more than twice as high than that of adults.
According to Statistics Canada, 387,700 people between the ages of 15 and 24 failed to find workin 2013. That’s 13.7 per cent of the youth population, compared to a 5.9 per cent unemployment rate for those 25 and older.
While youth unemployment has historically been higher than national averages, the current level is still well above where it was before the 2009 recession, when just over 11 per cent of youth were trying to find work.
“It’s time for the federal government and Canadian businesses to get serious about the youth jobs crisis and work together to tackle it,” said Smith. “The employment situation of young people is worse today than before the recession, and that’s simply unacceptable.”
‘Youth Job Guarantee’ plan
At the heart of it, the Broadbent Institute’s plan is simple: private businesses and the government should both invest equal amounts to pay young people to work.
The report estimates that an investment of $670 million from both sectors will be enough to create more than 180,000 jobs, dropping the youth unemployment rate by two percentage points, closer to where it was seven years ago.
The think-tank’s vision is to take that money and, in addition to the funding already offered by the government, create 12-week-long, paid co-op, internship and job placement positionsto “kick-start” the careers of young Canadians.
At a pay rate of $15 per hour, thegroup says it’s possible to drop the number of out-of-work youth by nearly 50,000people at any given time.
It’s not unrealistic that companies have excess cash to spend, says Andrew Jackson, a senior policy advisor for the Broadbent Institute. He says many businesses have assets they’re not putting to use.
“It basically means that they’ve got a lot of money tucked into the bank that they’re either not paying out to shareholders or actively investing in the company,” said Jackson. “It’s essentially just sitting there collecting small amounts of interest until business has the confidence to invest.”
Struggling to bounce back
In addition to disproportionate unemployment rates, another struggle for youth is that inexperienced employees are generally much harder hit by economic downturns.
According to the Broadbent Institute, half of all job losses between 2008 and 2009 were experienced by those aged 15 to 24.
“As the old adage goes, young workers are the ‘last hired and first fired,’” reads the report.
Smith says an injection of unused cash could be used to create jobs specifically for those young workers, referring to businesses’ unused assets as “dead money,” a phrase former Bank of Canada governor Mark Carney used in criticising the corporate sector in 2012.
Canadian corporations are collectively sitting on hundreds of billions of dollars that isn’t being spent or invested, he says, which could be used to revitalize the youth job market.
“The private sector needs to put some of this dead money -- this $630 billion it’s sitting on, $9 billion in the last quarter alone – and it needs to start putting some of this money to work, get it back into the economy,” Smith says.
But some think corporations shouldn’t be pushed into spending their money.
"Businesses need to be allowed to do the things it needs to do to help grow the economy and help grow opportunities for everyone," said Kevin Lacey of the Canadian Taxpayers Federation.
But Smith calls the amount they’re asking from corporations a “drop in the bucket,” and says something as simple as a summer placement or paid internship is crucial for those looking to begin a career.
“So many Canadian youth at the moment want to work, have fantastic training and education, and just can’t find that all-important first placement or first apprenticeship opportunity,” he says.
Jackson said another tangible benefit of getting graduates working is avoidance of the inevitable skill degradation.
“If businesses were farsighted, they’d see the reality that all of labour force growth is going to come from young Canadians,” he said.
“It’s not really in anyone’s interest to see large numbers of people leaving the post-secondary education system and being unemployed or underemployed, because we’re clearly going to need their skills and experience in the future.”
Canada and the rest of the world
Before the recession, Canada’s youth unemployment sat right around the world average.
According to the UN’s International Labour Organization, while the world’s unemployment percentage rose modestly in 2009, Canada’s jumped significantly -- a trend also seen in the European Union and other developed economies.
Youth jobless rates vary significantly between countries. Compared to countries like Greece, Spain and Croatia – where more than half of youth struggle to land work – Canada’s numbers seem stable.
But other countries, like Germany, Austria and Japan, have youth unemployment rates below 10 per cent.
Smith said most people probably don’t realize how difficult the job hunt still is for young Canadians.
“Since the recession, job prospects for many of us have bounced back. But they have actually diminished for young people,” he said. “It’s a very worrisome situation.”