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
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
"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
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
"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:
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
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industries as well as top-ranked research for our corporate, government and
Benjamin Tal, Deputy Chief Economist, CIBC World Markets Inc. at (416)
956-3698,email@example.com or Kevin Dove, Head of External Communications
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-0- Jun/20/2013 15:00 GMT
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