Social Policy in Ontario

The government should be the first to fight youth unemployment

Posted on July 11, 2012 in Debates

Source: National Post — Authors: Christopher Nardi

NationalPost.com – FullComment
Jul 11, 2012.    Christopher Nardi

Always the entertainer, television anchor Stephen Colbert recounted that “I’ve always said America’s colleges are an incubator of imaginative ideas. For instance many students imagine that college will help them get a job.” Though funny, Colbert’s words ring especially true since the Organization for Economic Co-operation and Development (OECD) released its report on employment in the post-recession years on Tuesday. According to the report, the economic recovery has been somewhat of a misnomer for young people.

Across OECD countries, the report notes that there was a continuous deterioration of the percentage of employed youth relative to older age groups since 2008, as more of the available work went to workers aged 55 or older. Average unemployment for those aged 15 to 24 across OECD countries stood at 16.1% in April 2012, which represents a little more than two times the rate for workers of all ages. These numbers are comparable to the latest figures from Statistics Canada, as the organization indicated that youth unemployment is almost at 15%, compared with 7.2% for the general population.

Beyond the financial issues youth incur due to unemployment, being out of work for a year or more can have a “scarring effect” that can have a negative impact on long-term earnings and career paths for young people, the report indicated. “We need to avoid the risk of a lost generation by all means,” the OECD’s Secretary-General Angel Gurria said in a release of the employment outlook Tuesday.

Youth unemployment is more often calculated using an index known as NEET, which measures the percentage of youth “not in education, employment, or training.” Comparatively to other OECD countries, Canada does [rather] well in terms of the NEET index, with a 13% NEET score as opposed to 16.4% in the rest of the OECD countries.

Despite Canada’s comparatively healthy NEET score, TD Bank economist Francis Fong reports that, while the Canadian job market seems to have fully recovered from the recession, those in the 15-24 age category are still underwhelmed with job opportunities. More than half of the 430,000 jobs lost during the 2008-09 slump were in this youthful age group, and almost none of those jobs had been recovered.

“Youth unemployment is still at a very elevated level in Canada,” Fong said. “The competitive challenges this generation faces is very unique; they are competing with graduates from (other countries), and in addition, they have all these older workers getting back into the labour force.”

With youth unemployment such a dire issue for Canada’s future workforce, experts are now turning their attention towards fixing the issue. But since unemployment is such a vast issue with no one cause, whose role is it to resolve the problem?

Cue: the Canadian government.

“Sectoral policies, in particular, can promote job creation in the medium to long term, provided they are well designed and targeted to sectors with high potential for employment growth,” explained a 2009 OECD report on promoting youth employment. “Well-targeted policies can promote private initiatives in traditionally ‘youth-friendly’ sectors such as tourism, catering, information and communications technology (ICT), basic and social services, including health, as well as in the sports sector.”

The report also explained that the successful development of youth business hinges upon good access to well-integrated services such as management training, business mentoring programs, financial services, support in gaining access markets and networking opportunities in order for youth to feel confident when entering a highly competitive milieu such as the business world. Fortunately, all those services happen to be ones that the government can provide through well-designed school programs and other educational and mentorship initiatives. Governments from coast to coast already help students go to school, through grants, tuition subsidies and tax credits, but education isn’t the end goal of these programs in and of itself. An educated workforce is. Some of those funds might be better invested going to making sure Canadian youths get a job, not just an education.

In an increasingly competitive business world, Canadian youth continue to struggle to penetrate a shrinking job market, and those struggles risk having negative impacts on long-term earnings and career paths if long-term unemployment solutions are not put into action. As businesses have trouble keeping even their present employee base intact, the Canadian and provincial governments shouldn’t forget that it isn’t the older generation that drives today’s, nor tomorrow’s, economy. Rather, they should remember that any policies aimed at the employment and education needs of today’s youth will reap them tenfold the benefits in the future.

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Tags: economy, ideology, participation, poverty, standard of living, youth

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