Gap between youth and adult employment widest in 35 years

Young people in Canada have long faced a tougher slog in the job market than adults, but the gap between youth and adult unemployment has now reached the widest gap in 35 years, a new Statistics Canada report shows.

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.�

Part of what you’re seeing is a slow recovery from the last recession

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.

Related

“Since it is less expensive for an employer to replace a worker who has just been hired than a more experienced worker, the employer may be more inclined, when workforce reductions are occurring, to lay off a worker with less seniority,� said Mr. Bernard.

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.

A study this week that surveyed Boomers and Generation Y on their ability to save in their 20s, suggested that young people today find it harder than previous generations. About 39% of youth say their salaries were too low to cover their living expenses, compared to 30% of Boomers, the TD Canada Trust study found. Also, 38% of young people surveyed said they were saddled with debts from credit cards, loans and lines of credit, compared with 26% of Boomers.

Article source: http://www.canada.com/between+youth+adult+employment+widest+years/8511123/story.html