Canadian youth facing unprecedented challenges finding quality employment: CIBC

Canadian youth facing unprecedented challenges finding quality employment: CIBC 
One in 10 young Canadians economically at risk 
TORONTO, June 20, 2013 /CNW/ - Canadian youth are more educated than ever but 
are facing challenges their parents didn't and are increasingly struggling to 
find lasting and meaningful jobs, finds a new report from CIBC World Markets. 
"The economic reality for youth today is very different than that of previous 
generations," says CIBC Deputy Chief Economist Benjamin Tal. "While young 
Canadians are resourceful and capable of adjusting to the pulse of an ever 
changing labour market, they are faced with problems unknown to their parents. 
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." 
The CIBC report notes that while the youth unemployment rate is at its 
historical average, the ratio between youth unemployment and the unemployment 
rate for older Canadians is now at a record high. "With youth unemployment 
running at nearly 2.4 times that of Canadians aged 25 and older, one begins to 
see the growing challenges for younger Canadians to find lasting and 
meaningful work." 
Mr. Tal, who delivered his report to a group of Grade 10 scholarship students 
from across the country in downtown Toronto today, notes that getting the 
right education is no longer enough. "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. 
"In fact, one in five youth aged 15-24 not working today has never held a job. 
That is 40 per cent higher than the long-term average. Statistics show that 
youth who gain work experience and receive on the job training while studying 
are much more likely to find suitable and sustainable employment." 
To truly understand the economic impacts of youth employment, Mr. Tal looked 
at youth aged 15-19 separately from those 20-24 and distinguished between 
those in school and those not. 
He found there are about 225,000 youth who are neither in school or in the 
labour market - with the majority (68 per cent) being in the 20-24 age group. 
"When you add this group to those who are not enrolled in school but 
registered as unemployed, you get a clearer picture of youth unemployment. 
From a policy perspective, this is the pressing problem as this combined group 
consists of 420,000 economically at risk youth, or nearly one in ten of young 
Canadians. 
"This target group accounts for 5.9 per cent of total youth aged 15-19 but a 
significantly higher 12.5 per cent of those aged 20-24. These youth face a 
harsh job market environment, real entry barriers and likely do not have the 
skills necessary to compete. This group will likely remain chronically 
unemployed without action to re-educate or provide themselves with skills 
training." 
On the positive side, Mr. Tal notes that school enrolment is at a record high 
with 83 per cent of those 15-19 in school and 44 per cent of those aged 20-24. 
At the same time, for the older age group, the labour market participation 
rate fell to a record low of 76 per cent, reflecting a tougher job market and 
the need for additional education. 
Mr. Tal's study found that once leaving school youth are becoming increasingly 
under-employed. About 22 per cent of teens and 14 per cent of those aged 20-24 
who are non-students are only working part-time. This is a record high for 
both age groups and a significant increase from previous cycles. 
"About 70 per cent of these youth working part-time are doing so 
involuntary—meaning they want to work full-time. Moreover, we have seen a 
significant increase in the share of young workers in temporary and contract 
or term employment from about 8 per cent in the late 1990s to just under 12 
per cent. This is a much greater increase in these positions than we have seen 
in the aged 25+ category." 
The report suggests that classifying 15-18 year olds who are enrolled in high 
school and also searching for part-time employment as "unemployed" really 
overstates the magnitude of youth unemployment. "A point can be made that many 
of these high school students should not be classified as unemployed as their 
main activity is learning," says Mr. Tal. 
"Adjusting for this factor brings the unemployment rate for this age group 
down from close to 20 per cent to only 5.4 per cent. This factor also works to 
reduce the national unemployment rate from the headline 7 per cent to 6.4 per 
cent. However, to the extent that this phenomenon represents the growing 
proportion of high school students that need to participate in the labour 
market in order to financially support their families, this should be seen as 
a worrying trend." 
Mr. Tal believes that the improved understanding of the dynamics of the youth 
unemployment problem means that initiatives taken by the government and 
corporate Canada can be more focused and effective in preventing further 
worsening. "One of the priorities of the Canadian education system needs to be 
more innovation and flexibility in combining education and work-related 
training. 
"Research is also needed to better understand how concepts such as team-work, 
creative thinking, problem-solving and leadership skills enhance the 
employability of students and then, to find ways to incorporate these concepts 
into the curriculum. For Canada's economy to grow and our standard of living 
to remain high, this is an imperative." 
The complete CIBC World Markets report is available at: 
http://research.cibcwm.com/economic_public/download/if_2013-0620.pdf 
CIBC's wholesale banking business provides a range of integrated credit and 
capital markets products, investment banking, and merchant banking to clients 
in key financial markets in North America and around the world. We provide 
innovative capital solutions and advisory expertise across a wide range of 
industries as well as top-ranked research for our corporate, government and 
institutional clients. 
Benjamin Tal, Deputy Chief Economist, CIBC World Markets Inc. at (416)  
956-3698,benjamin.tal@cibc.ca or Kevin Dove, Head of External Communications 
at 416-980-8835,kevin.dove@cibc.ca. 
SOURCE: CIBC 
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CO: CIBC World Markets
ST: Ontario
NI: FIN ECOSURV  
-0- Jun/20/2013 15:00 GMT