FINA Committee Report
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CHAPTER THREE: YOUTH AS POTENTIAL OR CURRENT EMPLOYEESA. The statistical context1. Unemployed YouthSince at least January 1976, the earliest year for which these data are publicly available, Canada’s youth unemployment rate has consistently exceeded the rate for the population aged 25 and over. According to Statistics Canada, over the January 1976–December 2013 period, the youth unemployment rate was – on average – 2.1 times the rate for people aged 25 and older; in 2013, it was 2.3 times higher. Figure 3 illustrates the unemployment rate in Canada for various age groups. The unemployment rate, which is particularly high for youth aged 15 to 19, tends to decrease with age. Figure 3 – Unemployment Rate, Canada, by Age Group, 1976–2013
Source: Statistics Canada, Table 282-0002, “Labour force survey estimates, by sex and detailed age group, annual,” CANSIM (database), accessed on 13 January 2014. For young people, finding a job can be especially difficult when an economic downturn occurs; some employers cease to hire workers and, when downsizing their workforce, lay off younger workers prior to more experienced workers. Statistics Canada data indicate that, on average in 2009, 2.8% of youth who were working in a given month became unemployed in the following month; for those aged 25 and older, this percentage was 1.4%. Moreover, according to Statistics Canada, in 2013, the average duration of unemployment for those aged 15 to 24 was 11.9 weeks, compared to 24.8 weeks for people aged 25 and older. As described below, youth unemployment rates vary across demographic groups, provinces and countries. For example, some groups of young people – such as Aboriginal Canadians, immigrants, visible minorities and those with a disability – often have relatively greater difficulties in the labour market. As shown in Table 3 for 2011 or 2012, the unemployment rate for young people in the aforementioned four groups was higher than that for other young people. Table 3 – Youth Unemployment Rate, Canada, by Selected Demographic Group, 2011 or 2012 (%)
Note: Data for “with a disability” or “without a disability” are not available by five-year age groups (15 to 19 years and 20 to 24 years). Sources: Aboriginal identity and immigrant status: Statistics Canada, “2011 National Household Survey,” Data Tables, Labour Force Status by Aboriginal identity, immigrant status and visible minority status; Presence of disability: Statistics Canada, “2012 Canadian Survey on Disability.” As shown in Tables 4 and 5, variations in the youth unemployment rate between the first half of 2008 and the first half of 2013 have differed across provinces and between the two age groups of youth aged 15 to 19 and youth aged 20 to 24. On a percentage basis, between the first half of 2008 and the first half of 2013, the unemployment rate for persons aged 15 to 19 increased the most in British Columbia, Nova Scotia and New Brunswick; the rate in Newfoundland and Labrador, and in Prince Edward Island, fell. Table 4 – Unemployment Rate and Variation, by Province, Persons Aged 15 to 19, 1st Half of 2008 and 1st Half of 2013
Note: To calculate the percentage variation, the difference between the 2008 and 2013 rate is divided by the 2008 rate. Source: Statistics Canada, Table 282-0001, “Labour Force survey estimates (LFS), by sex and detailed age group, unadjusted for seasonality,” CANSIM (database), accessed on 15 January 2014. For youth aged 20 to 24, between the first half of 2008 and the first half of 2013, the unemployment rate – on a percentage basis – increased the most in British Columbia, Saskatchewan and Alberta; the rate in Newfoundland and Labrador, and in Quebec, fell. Table 5 – Unemployment Rate and Variation, by Province, Persons Aged 20 to 24, 1st Half of 2008 and 1st Half of 2013
Note: To calculate the percentage variation, the difference between the 2008 and 2013 rate is divided by the 2008 rate. Source: Statistics Canada, Table 282-0001, “Labour force survey estimates, by sex and detailed age group, unadjusted for seasonality,” CANSIM (database), accessed on 15 January 2014. Finally, several Organisation for Economic Co-operation and Development (OECD) countries experienced an economic recession between 2007 and 2012. According to the OECD, during this period, real gross domestic product (GDP) fell significantly in the following countries: in Greece by 20.1%; in Italy by 6.9%; in Portugal by 5.4%; in Spain by 4.7%; and in the United Kingdom by 3.0%. Other countries experienced an economic growth rate during that period that was below the OECD average of 3.0%; for example, growth was 0.5% in France and 2.1% in Belgium. That said, a number of countries had a growth rate during that period that was higher than the OECD average: 3.8% in Germany; 4.0% in the United States; 5.4% in Canada; 6.1% in Switzerland; and 12.8% in Australia. Reductions in real GDP have effects on labour markets, and can lead to relatively higher unemployment rates, all other factors remaining the same. Table 6 presents, for various age groups, the unemployment rate in 2007 and 2012, the most recent year for which data are available for most OECD countries. Table 6 – Unemployment Rate and Variation, Selected OECD Countries, by Age Group, 2007 and 2012 Note: To calculate the percentage variation, the difference between the 2007 and 2012 rate is divided by the 2007 rate. Source: Organisation for Economic Co-o
peration and Development, OECD.StatExtracts (database), LFS by sex and age group, indicators, accessed on 4 June 2014. As shown in Table 6, on a percentage basis, the increase in youth unemployment rates for OECD countries on average – at 30.3% for those aged 15 to 19 and 40.6% for those aged 20 to 24 – were lower than the 45.8% increase observed for those aged 25 to 64 years. In Canada, Portugal, France and Australia, the largest percentage variations in unemployment rates were in the younger age groups. Table 6 indicates that, in 2012, Canada’s unemployment rate for those aged 15 to 19 – at 20.1% – was slightly higher than the average of the OECD countries – at 19.8%. However, in that year, Canada’s unemployment rate for youth aged 20 to 24 was somewhat lower than the OECD average, at 11.0% and 14.9% respectively. Moreover, in 2012, the unemployment rate for youth aged 15 to 19 was much lower in Canada than in a number of southern European countries, such as Spain, Greece, Portugal and Italy; in these countries, youth of this age had an unemployment rate that exceeded 50.0%. Germany, which has a highly developed apprenticeship system, is one of the few OECD countries to have experienced a decline in the unemployment rate between 2007 and 2012 for both youth and the rest of the population. According to the International Labour Organization, in 2010, Germany had 39 apprentices per 1,000 employed persons, compared with 30 in Canada and 14 in the United States. 2. Young EmployeesStatistics Canada data indicate that nearly 2.5 million Canadians aged 15 to 24 worked in 2013. Between 2012 and 2013, employment in that age group grew by 22,000, or 0.9%; there was a 1.3% increase in employment of persons aged 25 and older, which is equivalent to about 200,000 jobs. Statistics Canada data show that, of these 22,000 jobs, 2,700 – or 12% – were full time, which is considered to be 30 hours or more per week. In 2013, 52% of youth were employed full time, while the rate for people aged 25 and older was 86%. According to Statistics Canada, in 2013, 75.5% of people aged 15 to 24 who were not in school during the months of January to April and September to December worked, compared to 66.9% and 36.2% respectively for part-time and full-time students aged 15 to 24. From 2012 to 2013, Statistics Canada data indicate that the most significant gains in full-time youth employment were in business services relating to building and other support services, with an increase of 13,200 jobs or a growth rate of 20.7%, and in technical, scientific and professional services, with an increase of 11,700 jobs or a growth rate of 17.1%. During those years, the most significant declines occurred in health care and social assistance, with a loss of 10,300 jobs or a decline of 9.5%, and in manufacturing, with a loss of 10,000 jobs or a decline of 8.2%. Moreover, Statistics Canada data in relation to part-time youth employment indicate that, from 2012 to 2013, gains were made in areas where jobs are most often held by youth and students, such as in accommodation and food services, with an increase of 10,000 jobs or a growth rate of 3.3%, and in retail trade, with an increase of 8,900 jobs or a growth rate of 2.2%. Part-time youth employment in technical, scientific and professional services also increased during those years, with an increase of 7,900 jobs or a growth rate of 48.2%. B. Federal supportsIn order to improve employment opportunities for youth, the federal government delivers a range of employment programs designed specifically for them. It also provides funding to the provinces/territories to help them deliver their own skills and employment initiatives, some of which may benefit youth. 1. Employment ProgramsAs an employer, the federal government hires students through three main programs: the Federal Student Work Experience Program, which provides students with temporary employment; the Research Affiliate Program, which provides part-time employment to post-secondary students who require experience; and the Co-operative Education and Internship Program, which provides four-month, full-time paid practicums to post-secondary students enrolled in a co-op program. The main federal program designed to help improve the employment situation for youth is the Youth Employment Strategy, which involves 11 federal departments and agencies. It has three main components:
Table 7 presents actual spending in 2011–2012 and 2012–2013, and planned spending in 2013–2014, for the three main components of the Youth Employment Strategy. Table 7 – Youth Employment Strategy, Actual and Planned Spending, 2010–2011 to 2013–2014 ($ millions)
Sources: 2013–2014: Human Resources and Skills Development Canada, Report on Plans and Priorities 2013–2014, Supplementary Information Tables in the 2013–2014 Reports on Plans and Priorities, Details of Transfer Payment Programs, Horizontal Initiatives, Youth Employment Strategy; 2010–2011 to 2012–2013: Human Resources and Skills Development Canada, Departmental Performance Reports, Supplementary Information Tables, Details of Transfer Payment Programs, Horizontal Initiatives, Youth Employment Strategy, 2010-2011, 2011-2012 and 2012-2013. The federal government also supports young Aboriginal Canadians’ participation in the labour market through the First Nations and Inuit Youth Employment Strategy. It has two main initiatives:
2. Agreements with the Provinces and/or TerritoriesThrough Labour Market Development Agreements (LMDAs), the federal government provides funding – which may benefit youth – to provinces/territories to deliver skills and employment initiatives offered under the Employment Insurance program. As well, through Labour Market Agreements (LMAs), the provinces/territories receive federal funds to provide assistance to unemployed individuals who do not qualify for Employment Insurance training programs and to employed individuals who lack a high school diploma or recognized certification or who have low literacy and essential skill levels. As well, the provinces receive funds through Labour Market Agreements for Persons with Disabilities (LMAPDs) to help them deliver programs designed to improve the employment situation for persons with disabilities. The LMAs expired on 31 March 2014. In the 2013 federal budget, the government announced that it would: undertake negotiations with the provinces/territories to create the Canada Job Grant under the renewed LMAs; renegotiate the LMDAs; and introduce new LMAPDs. The Canada Job Grant is expected to be launched during 2014. C. Witnesses’ views on the challenges faced by unemployed youthThe Committee’s witnesses identified a number of issues faced by unemployed youth – including the effect of the recent economic recession, the competition for jobs, employment prospects for youth in certain sectors, relevant skills, labour mobility and federal government programs – and highlighted some of the social impacts of their unemployment. 1. The Effects of RecessionsThe Canadian Labour Congress spoke to the Committee about the lingering effects of the 2008–2009 recession on youth unemployment and labour force participation, noting that – in January 2014 – 540,000 youth aged 15 to 29 were unemployed, an increase of 100,000 youth since October 2008. Moreover, it indicated that, over the October 2008 to January 2014 period, more than 350,000 youth aged 15 to 29 left the labour force because they returned to school or pursued skills training, were discouraged or accepted unpaid work. The Conference Board of Canada stated that the youth labour market lost 200,000 jobs in the 2008–2009 recession, and that the youth labour force participation and employment rates did not increase in 2012 or 2013. Statistics Canada said that, regardless of economic conditions, youth aged 15 to 24 are at greater risk of being unemployed than are individuals aged 35 to 54. According to it, in 2009, the highest unemployment rate for youth aged 15 to 24 was 15.2%, which was slightly lower than the peak during the recessions in the early 1980s and early 1990s. In 2013, the unemployment rate for youth aged 15 to 24 was 2.5 percentage points higher than its 2007 value of 11.6%, and the unemployment rate of youth aged 25 to 34 was 1.1 percentage points higher than its 2007 value of 5.7%. Statistics Canada suggested that the relatively higher unemployment rates for youth aged 15 to 34 reflect their greater risk of being laid off prior to older workers. When comparing the unemployment rate for youth aged 15 to 24 with that for individuals aged 25 to 54, the Canadian Labour Congress highlighted that the rate for the former was 2.4 times the rate for the latter in 2012, a difference that was at its highest level since comparable data became publicly available in 1976. 2. The Competition for JobsIn the context of Canada’s slow economic growth, the Canadian Centre for Policy Alternatives told the Committee that employers have a large pool of candidates from which to choose when they are hiring for entry-level positions; the pool includes newcomers to Canada, older workers and youth. The Conference Board of Canada noted that the increase in experienced employees working part time has reduced such opportunities for youth. Furthermore, the Canadian Federation of Students commented that older workers with more experience are disproportionately favoured in job competitions. That said, Tammy Schirle argued that there is no evidence of a connection between youth labour market outcomes and the number of older workers in the labour force. The Royal Bank of Canada shared the results of a poll it commissioned in August 2013: 73% of graduates who were polled indicated that a lack of job experience was a barrier to finding their first job, while 77% identified a lack of connections and a network as such a barrier. As well, it said that the poll results revealed that, among the respondents who found work, nearly one half of recent graduates stated that having applicable job experience helped them in starting their career. Witnesses also highlighted the issue of competition between foreign and domestic workers for jobs, with the Canadian Centre for Policy Alternatives mentioning that the number of temporary foreign workers in the pilot project for occupations requiring lower levels of formal training more than doubled from 13,000 workers in 2007 to 30,000 workers in 2014; it also indicated that 65,000 youth have been accepted through the international youth work experience program. According to Restaurants Canada, for businesses in the restaurant sector in certain regions, temporary foreign workers – who represent less than 2% of the 1.1 million workers in that sector – are the only option. 3. Employment Prospects in Specific SectorsThe Committee’s witnesses commented on the generational change in the number of youth employed in various sectors. Unifor noted that, since 1976, seven sectors have increased the number of jobs for youth, with the biggest job gains occurring in the retail and wholesale trade, and hospitality sectors. According to it, one half of all young workers are currently employed in these two sectors; a generation ago, one in four young workers was employed in those sectors. Finally, Unifor indicated that the retail sector remains the leading employment sector for youth; in the past, jobs in this sector were well-paid and resulted in successful careers. Unifor also spoke about Canada’s manufacturing sector, suggesting that the sector’s decline has affected young workers to a greater extent than workers who are older, as youth with the least seniority are laid off first. Regarding initial jobs for youth, the Canadian Federation of Independent Business commented that small businesses play an integral role in providing youth with their first experience in the workforce. It highlighted the results of a survey of its members in the fall of 2013 that showed that one half of respondents had hired a young person in the last three years. 4. Relevant SkillsIn speaking to the Committee, the Dauphin Friendship Centre shared the results of surveys it conducted in 2009 on youth aged 15 to 30 and on employers; the focus was the factors preventing youth from fully participating in the economy. According to it, the surveys identified a number of barriers that youth face in entering the workforce, including insufficient education, a family history of unemployment, inadequate access to childcare, limited employment experience, and a lack of family and community supports; employers reported difficulties in finding qualified employees, and indicated that youth lacked workplace skills, such as customer service, verbal communication, and interpersonal and organizational skills. In its brief submitted to the Committee, the Confédération des syndicats nationaux noted that youth who are out of school and who are not employed face the risk that their skills will become “unrecognized.” It also indicated that employers avoid job candidates who have a gap in their work or education history. 5. Labour MobilityThe Canadian Labour Congress told the Committee that labour mobility is an important issue, arguing that the reduced mobility of youth limits their employment prospects. According to it, personal reasons – such as moving away from their community and family, and having small children – may reduce labour mobility. Employment and Social Development Canada noted that youth leave their community to go to post-secondary education, and that their home communities would like them to return for employment during the summer months. It highlighted that the Canada Summer Jobs program provides 35,000 jobs for youth in their communities. 6. Federal ProgramsIn speaking to the Committee about the Employment Insurance (EI) program, the Canadian Labour Congress indicated that eligibility requirements for benefits are too high, and access to training supports is difficult for young workers. According to it, 18% of unemployed young men and 8% of unemployed young women were able to qualify for EI benefits in 2013. The Confédération des syndicats nationaux suggested that EI rules are an obstacle for youth employed in the tourism sector, which is seasonal. In the view of Tammy Schirle, high wage rates are the preferred method for attracting employees. She indicated that the Temporary Foreign Worker Program (TFWP) distorts Canada’s labour market and prevents youth from identifying the sectors that are experiencing a labour shortage; such shortages often put upward pressure on wages. In its brief submitted to the Committee, the Confédération des syndicats nationaux stated that, while the federal government provides $330 million per year for the Youth Employment Strategy, the Strategy’s programs are not adequately delivered, as there is no guidance available for youth who are excluded from the labour market. As well, it highlighted the existence of confusion about the federal and a similar provincial program in Quebec, as some programs are duplicated. According to the brief submitted to the Committee by First Work, the Skills Link program is inadequately resourced in relation to its support for the mobility of youth graduates, national promotion of the program and serving as a forum in which communication about “best practices” among funding recipients can be facilitated. It also noted that funding recipients are not made public, which limits transparency and the sharing of information. Finally, the Canadian Labour Congress noted that reduced LMA funding has decreased the support available to youth for training. 7. Social ImpactsThe Boys and Girls Club of Canada, in its brief submitted to the Committee, argued that the high rate of unemployment for youth during the summer months could result in increased social costs for Canadians in low-income neighbourhoods that have a high crime rate. It commented on U.S.-based research that found a decrease in arrests in relation to violent crimes in high-crime communities that had a youth summer jobs program, such as the One Summer Plus program in Chicago. According to the Boys and Girls Club of Canada’s brief, such youth summer jobs programs help at-risk youth address common judgment and decision-making challenges, and provide regular opportunities to interact with a mentor. In speaking about the intergenerational effects of youth unemployment, the Canadian Labour Congress noted that parents of unemployed youth cannot retire because they must provide financial support to their children. Moreover, Wayne Lewchuk – a professor at McMaster University who appeared as an individual – suggested that children who leave their communities for work might not be able to care effectively for their elderly parents. D. Witnesses’ views on solutions for unemployed youthThe Committee’s witnesses proposed a number of solutions for youth unemployment. For example, they mentioned federal employment measures, labour mobility, skills development, collaborations and partnerships, and the Employment Insurance program. 1. Federal Employment MeasuresThe Canadian Union of Public Employees and the Boys and Girls Club of Canada, in its brief submitted to the Committee, proposed additional annual funding for the Youth Employment Strategy to help youth integrate into the labour market. While not requesting an increase in annual funding for the Youth Employment Strategy, First Work – in its brief submitted to the Committee – suggested that a greater percentage of the current funding should be allocated to the Skills Link program, and that the additional amount could be used to address youth mobility, regional and national sharing of information among funding recipients, and public reporting. In its brief submitted to the Committee, the Confédération des syndicats nationaux requested that the federal government give Quebec the right to opt out of the Youth Employment Strategy, with full compensation; if Quebec is not able to opt out, the Strategy should more effectively target youth who are excluded from the labour market. A variety of changes to the TFWP and the international youth experience program were proposed. The Canadian Centre for Policy Alternatives suggested that every employer that applies to the TFWP or the international youth experience program should advertise that job domestically for a few weeks on the national job board administered by the federal government. The AFL-CIO requested that the TFWP be linked to training for Canadians, with a requirement that employers using the program be obliged to demonstrate a plan to train Canadians to fill the position. The Canadian Union of Public Employees highlighted the Council of the European Union’s Youth Guarantee program – which provides youth with an offer of employment, further education and apprenticeship or traineeship within four months of their graduation – and urged the federal government to implement a similar program. Regarding positions for youth within the federal government or through government contracts, the Canadian Union of Public Employees called for the government to provide better employment opportunities for young workers, while the Canadian Centre for Policy Alternatives suggested that one fifth of all jobs associated with federally funded infrastructure contracts should be reserved for youth. In its brief submitted to the Committee, Unifor proposed that public infrastructure projects have minimum hiring requirements for young workers; these requirements would be determined in consultation with government, labour and community representatives. The Confédération des syndicats nationaux, in its brief submitted to the Committee, requested stimulative fiscal policy as a means of creating jobs for youth and the establishment of an industrial policy to revive the manufacturing sector while respecting provincial jurisdiction. The Canadian Centre for Policy Alternatives advocated increased funding for summer jobs programs that would help youth obtain jobs that are essential in the community, such as helping the elderly. In its brief submitted to the Committee, the Tourism Industry Association of Canada urged the creation of a U.S. marketing campaign, modernization of Canada’s visitor visa processing, and an aviation policy that does not offload operational and security costs onto the public. Finally, Tammy Schirle advocated an improved childcare system to facilitate the labour force participation of young women. 2. Labour MobilityA number of the Committee’s witnesses made suggestions designed to reduce barriers to youth labour mobility. For example, the Canadian Centre for Policy Alternatives requested a two-month wage subsidy for employers in slow-growth or high-unemployment regions that hire youth under the age of 30. In noting that certain regions in Quebec are experiencing youth out-migration, the Fédération étudiante universitaire du Québec proposed the creation of a tax credit to assist youth who relocate to such regions. The Progressive Contractors Association of Canada argued for the creation of a lump-sum mobility grant that would be provided through the EI program; the grant would allow an unemployed person to use his/her EI benefits in order to relocate to another area of the country, and would finance the costs associated with finding a job, training and relocating. The Conference Board of Canada proposed a subsidy for mobility costs that could fund expenses relating to travelling, finding a job and housing. Finally, the Canadian Centre for Policy Alternatives requested a “cost offset” for youth under age 30 who are willing to move to regions with a labour shortage, while the Canadian Labour Congress advocated the creation of a national childcare strategy to facilitate job mobility for young workers with children. 3. Skills DevelopmentIn speaking to the Committee, the Dauphin Friendship Centre characterized the lack of essential skills as a barrier to youth employment, and highlighted a program conducted by it in partnership with Service Canada, provincial ministries and youth organizations; the program, which is designed to prepare youth for employment in their community, includes group-based learning, individual instruction and counselling. It suggested a collaborative approach involving the federal, provincial and local levels of government to provide unemployed youth with essential skills and literacy training. Habitat for Humanity argued that skills training could be better matched to available jobs through a public-private partnership, and highlighted the successful partnership it has with the Regina Trades and Skills Centre in providing short-term training for jobs. It encouraged the federal government to direct funding to such successful programs. The Canadian Federation of Independent Business commented that, in a 2013 survey of its members about the decision to hire and train an employee, the most popular response was related to reducing the costs associated with hiring an employee. It called for the creation of an EI training credit for small businesses that would reduce mandatory EI premiums for such businesses while a new employee is being trained. Restaurants Canada made a similar suggestion for an EI credit in relation to the hiring of new employees who are under age 25. In its brief submitted to the Committee, the Confédération des syndicats nationaux noted that training that is offered to the unemployed should be based on the jobs available in the labour market; that said, youth should be able to choose whether to improve their work skills or to develop new skills that would be recognized by a wide range of businesses. Furthermore, its brief said that apprenticeships and training should permit youth to become qualified for employment at various companies. In discussing the effectiveness of the Skills Link program, First Work – in its brief submitted to the Committee – suggested that a “red-tape commission” should be created to address the administrative burden faced by grant and contributions holders, delays caused by the decision-making process, and the issue of annual “request for proposal” requirements for multi-year projects. 4. Collaborations and PartnershipsThe Dauphin Friendship Centre informed the Committee that solving the problem of youth unemployment requires both a collaborative effort and support for socially innovative programming by federal, provincial and local levels of government; such programming includes that offered by the Dauphin Friendship Centre. The Confédération des syndicats nationaux noted that all parties – employers, unions and governments – must collaborate and work together as partners in creating jobs for youth, while the Canadian Union of Public Employees advocated national labour force planning in collaboration with industry, and labour, educational and research organizations. In its brief submitted to the Committee, the Boys and Girls Club of Canada requested that the federal government partner with youth-serving organizations to explore promising employment programs that combine a job, mentoring and social-cognitive programming; it specifically mentioned Chicago’s One Summer Plus program. Its brief also supported evidence-based practices that help to meet Canada’s training and employment needs. Unifor spoke about the German model of labour-government-employer collaboration and proposed more collaboration in Canada, such as through the sectoral councils. The Canadian Union of Public Employees urged the federal government to provide funding for organizations that support long-term collaborative planning, such as the sectoral councils and the Canadian Council on Learning. 5. The Employment Insurance ProgramIn speaking to the Committee, the Canadian Teachers’ Federation requested changes to the EI and other federal job-related programs that would increase access and availability for youth, and that would connect youth to employers seeking workers. As well, it advocated enhanced funding for paid job training. According to the Canadian Federation for Independent Business, for small business owners, mandatory employer payments for the EI program are a disincentive to hiring. It requested that EI rates be lowered once the EI account is balanced. Finally, in its brief submitted to the Committee, the Confédération des syndicats nationaux suggested that recent EI reforms that affect young workers should be repealed. E. Witnesses’ views on the challenges faced by employed youthThe Committee’s witnesses highlighted certain challenges faced by employed youth, commenting – in particular – on their skills, full- or part-time and permanent or temporary status, regional employment differences, wage rates and income, and working conditions. 1. The Skills of Employed YouthIn publicly available material submitted to the Committee, Statistics Canada noted that the proportion of individuals aged 25 to 34 who have a university degree increased from 18% in 1991 to 33% in 2011, and indicated that the proportion of jobs requiring a university degree may not have increased at the same rate, leading to a potential “skills mismatch” and youth being “overqualified” for their current position. It also stated that, in a weak labour market, a growing number of graduates may have to compete for a limited number of skilled positions, which may prevent certain individuals from getting the experience they need to find better jobs in the future. As evidence for the “overqualification” of employed youth, Statistics Canada highlighted – in publicly available material submitted to the Committee – that the proportion of positions occupied by university graduates aged 25 to 34 that require college-level education or less has been virtually unchanged since 1991. The material also mentioned that, in 2011, 33% of working youth aged 25 to 34 with a university degree in the humanities were employed in occupations requiring a high school education or less, while the proportion for education, health, architecture and engineering degrees was between 10% and 15%. Furthermore, according to Statistics Canada’s material, in 2011, the majority of youth aged 25 to 34 who were overqualified for their current position were in three fields of study: business, management and public administration; social and behavioural sciences and law; and humanities. Its material noted that – regionally – young workers in Quebec were less likely to be overqualified than those in Ontario in that year. The Canadian Chamber of Commerce remarked that, even though Canada has the largest proportion of post-secondary graduates among OECD countries, many young people are unemployed or underemployed. Regarding factors that may contribute to “overqualification,” Employment and Social Development Canada said that, after a recession, there is a certain degree of underemployment in the labour market; it often takes time for youth to find a job that matches their educational level. It also indicated that monetary reasons may induce youth to take a job that does not match their skills, provided that the new job will provide them with a relatively higher salary. Restaurants Canada noted that students work in the food services sector in order to pay for their education, and argued that such positions provide essential occupational skills; it characterized these jobs as an important first step on the career ladder. Mitacs stated that the transition from education into a “high-quality” job is much more difficult for the current generation of youth than for previous generations. In focusing on the transition to a job that matches their educational training and level, the Canadian Centre for Policy Alternatives commented that the transition might be difficult for youth who remain underemployed for a significant amount of time, as employers may choose a more recent graduate with newer skills. Finally, Mitacs mentioned that underutilization of the talent and training of youth results in lost opportunities for society to be more productive and innovative. 2. Full-time, Part-time and Temporary EmploymentStatistics Canada told the Committee that, over the last three decades, the percentage of youth in full-time employment decreased for men under the age of 34 and for women aged 15 to 24; more specifically, from 1976 to 2013, men and women under the age of 25 who were not full-time students experienced a decline in their full-time employment rate of 16 and 9 percentage points respectively. It also said that, since the early 2000s, the oil-producing provinces of Alberta, Saskatchewan, and Newfoundland and Labrador have experienced a two percentage point increase in the full-time employment rate of men aged 25 to 34; the other provinces have had a decline of four percentage points. In commenting on part-time work, Unifor noted – in its brief submitted to the Committee – that, in the previous generation, 21% of young workers had a part-time job; now, this rate is 48%. Its brief also indicated that the number of youth who are working part time involuntarily has increased since the previous generation; moreover, the rate at which the prevalence of involuntary part-time employment has risen exceeds the growth rate for youth who identify themselves as working part time voluntarily. The Canadian Labour Congress suggested that one third of young workers are employed part time, and many are in low-wage, temporary and insecure employment; in its view, this type of employment is found in the retail and service sectors. It stated that, in 2013, the underemployment rate for young workers aged 15 to 24 was 27.7%. Finally, the Canadian Teachers’ Federation said that young Canadians are struggling to find work that pays well. It provided the example of newly graduated teachers working part time for up to five years before finding a full-time position, and argued that the lack of housing in the north may limit opportunities for such individuals. 3. Wage Rates and IncomeStatistics Canada informed the Committee that, when adjusted for inflation, the average hourly wage of men aged 34 and under decreased between 1981 and 2000; however, between 2000 and 2013, it increased. In examining specific age groups in oil-producing and non-oil-producing provinces, and after adjusting for inflation, Statistics Canada found that men aged 25 to 34 who were employed in the oil-producing provinces in 2013 had hourly wages that were 10% higher than they were in 1981, while comparable men employed in non-oil-producing provinces had hourly wages in 2013 that were the same as in 1981. The Canadian Federation of Students commented on the median income of youth, noting that – among OECD countries – Canada has the largest proportion of university graduates earning less than the national median income. In its brief submitted to the Committee, Unifor indicated that one half of youth are employed in the retail and hospitality sectors, and that the hourly wage in these sectors is less than $12.00, the lowest in the Canadian economy and 20% less per hour than the wage paid in other sectors. In comparing the job market for youth in the current generation to previous generations, Wayne Lewchuk noted that there are many jobs for today’s youth; that said, on average, these jobs have a lower starting salary and offer fewer long-term prospects when compared to jobs for youth in previous generations. Regarding the prospects for youth in high-wage sectors, such as public administration, Unifor suggested that such sectors are in decline in Canada; in its brief submitted to the Committee, it indicated that more young workers today are in low-wage jobs than was the case a generation ago. The Canadian Labour Congress spoke about the effect of temporary employment on wages, noting that persistent unemployment leads to wage “scarring” that prevents youth from obtaining the wage rates that would be received if employment was more permanent. It highlighted an International Monetary Fund study that found that the wage “penalty” for unemployed young workers when they re-enter the workforce could be as high as 20% when compared to youth employed permanently. The Canadian Federation of Students indicated that temporary employment that results in wage “scarring” could have an effect on the economy by leading youth to delay major purchases, such as a house. However, the C.D. Howe Institute argued that there are insufficient data to indicate the prevalence of wage “scarring”; however, it also said that income growth for youth could be problematic if they are laid off during their early years in the job market. Wayne Lewchuk highlighted the growth of short-term contracts and temporary help agencies, suggesting that the result has been temporary employment that lacks the benefits and security of full-time employment. In speaking about youth who alternate between temporary jobs and unemployment, the Canadian Alliance of Student Associations noted that such individuals are “hidden” in labour market data, as they are included in the data for individuals with secure and well-paid jobs. Tammy Schirle suggested that skill depreciation resulting from movements into and out of the labour force for childcare and other reasons have a long-term impact on the wages of women. Finally, the Canadian Federation of Independent Business and the Canadian Chamber of Commerce said that public-sector wages can be higher than those in the private sector in certain cities, a situation that makes it difficult for small businesses to hire and retain employees. 4. Working ConditionsIn its brief submitted to the Committee, the Confédération des syndicats nationaux mentioned that little progress has been made in terms of work-life balance, which affects young families and women. Its brief also noted that employers may treat full-time employees and employees who do not work full time differently in terms of working conditions, even when they are employed in the same job classification; moreover, they may compensate individuals hired after a certain date at a different rate than employees hired before that date. F. Witnesses’ views on solutions for employed youthThe Committee’s witnesses proposed a number of measures that they believe would assist employed youth wishing to improve their current and/or future employment situation. For example, they made suggestions in relation to institutional arrangements and strategies, the proposed Canada Job Grant, wage subsidies, the retirement income of youth, changes to legislation and labour market information. 1. New Institutional Arrangements and StrategiesIn speaking to the Committee, Wayne Lewchuk suggested that new institutional arrangements that reflect the changing nature of the labour market, with less permanent employment, should be created. He highlighted the “flexicurity” system pioneered in Denmark that provides a flexible labour force for employers, as well as generous income support and retraining for people moving between jobs. The Canadian Teachers’ Federation called for the federal government to develop a national job creation strategy that would address the unemployment and underemployment of youth. According to it, the strategy should be developed in partnership with employers and labour organizations, and should ensure that unpaid internships do not exist. The Canadian Federation of Students and the University of Toronto Students Union advocated the development of a national strategy to address unemployment, underemployment and unpaid internships. In its brief submitted to the Committee, Unifor requested the establishment of a national, multi-stakeholder retail and hospitality sectoral council to institute standards for work hours, overtime, scheduling and employer-paid training for transferrable skills. The Canadian Labour Congress advocated an employment strategy that is linked to a training strategy, with the objective of putting workers on a career path to “good,” permanent jobs that are “decently” paid and have a pension plan. 2. The Proposed Canada Job GrantIn speaking to the Committee, the Association of Canadian Community Colleges made specific suggestions in relation to the proposed Canada Job Grant. For example, it mentioned that the measure could have dedicated funding for youth that would include training to upgrade essential skills in order to ensure productivity in the workplace. Moreover, it believed that students who take such training should receive credits that would be recognized throughout Canada. 3. Wage SubsidiesUnifor, in its brief submitted to the Committee, noted that there are currently 77 wage subsidy programs across Canada; 14 of these programs target graduates or young workers. However, its brief highlighted that none of the programs is specifically designed to encourage permanent or long-term job creation, and requested that wage subsidy programs be strengthened through providing businesses with incentives to hire young workers for permanent, stable jobs. The brief also supported regular assessments – by the federal government, in coordination with provincial/territorial agencies – of the outcomes of such programs in order to ensure that “job market objectives” are being met. 4. Retirement Income of Young WorkersSome of the Committee’s witnesses mentioned the lack of retirement planning by young workers. In its brief submitted to the Committee, the Confédération des syndicats nationaux requested that the federal government require all employers to provide a contributory, employer-sponsored pension plan. The Canadian Labour Congress proposed a “strong” Canada Pension Plan and Old Age Security system so that young workers would have income when they retire. 5. Changes to LegislationIn speaking to the Committee about barriers to workforce participation by youth, the Merit Contractors Association and the Progressive Contractors Association of Canada urged collaboration and consultation among the federal and provincial/territorial governments to reduce provincial/territorial barriers to labour mobility for apprentices and individuals with a trade certification, and to harmonize laws and programs that prevent such mobility. Regarding employment conditions, the Confédération des syndicats nationaux – in its brief submitted to the Committee – requested changes to federal labour legislation to ensure that youth do not experience discrimination on the basis of the date of hiring and/or their employment status. 6. Labour Market InformationA number of the Committee’s witness commented on labour market information. For example, the Canadian Alliance of Student Associations requested better labour market information, arguing that it would result in improved policies, training and hiring. The Canadian Federation of Students urged the federal government to collect relevant employment data on recent graduates, while the Canadian Teachers’ Federation proposed that Statistics Canada revise existing surveys and create new surveys to assess – accurately and consistent with internationally recognized standards – the true nature of youth unemployment. G. Witnesses’ views on the employment challenges faced by particular groups of youthThe Committee’s witnesses identified some of the barriers faced by particular groups of youth, including Aboriginal Canadians, those with a disability and those who are French-speaking in communities outside of Quebec where French is the minority language. 1. Unemployment Among Aboriginal Canadian YouthKiikenomaga Kikenjigewen Employment and Training Services provided the Committee with information about the Matawa First Nations, highlighting that the on-reserve unemployment rate was 70% to 75%, of which 65% can be attributed to youth. It also noted that most jobs on the Matawa First Nations reserve are summer jobs that pay the minimum wage. In its brief submitted to the Committee, the Joint Economic Development Initiative noted that young Aboriginal Canadians often live in communities with chronic unemployment. The Association of Canadian Community Colleges, in its brief submitted to the Committee, noted that 400,000 Aboriginal Canadians will reach working age within the next decade. The Merit Contractors Association was concerned that Aboriginal Canadian youth lack the academic prerequisites for apprenticeship programs; this lack of prerequisites has reduced the effectiveness of initiatives designed to increase the number of Aboriginal youth in the construction workforce. Finally, the Confédération des syndicats nationaux, in its brief submitted to the Committee, argued that youth who use the Skills Link program do not receive support. 2. The Qualifications of Disabled YouthThe National Educational Association of Disabled Students informed the Committee about a 2013 federal report entitled Rethinking Disability in the Private Sector that found that almost one half of all unemployed disabled individuals have a post-secondary education. In speaking specifically about youth with disabilities, it indicated that – in 2011 – the employment rate for youth aged 16 to 24 with a disability was 45.7%, while the rate for those in the same age group without a disability was 56%. Regarding the factors that may contribute to the low employment rate for disabled youth and graduates who are disabled, the National Educational Association of Disabled Students stated that individuals who are disabled and who are receiving government benefits might choose not to work because their benefits are reduced when they receive employment income. It also noted that employers do not properly match disabled employees with an appropriate job, and that they perceive such employees as being less productive. 3. Jobs and French-Speaking YouthThe Fédération de la jeunesse canadienne-française informed the Committee about the small number of French-only jobs in Canadian communities where French is spoken by the minority of the population, and about the difficulty faced by Francophone community organizations in recruiting educated and qualified workers. It also said that Francophone communities in rural areas are experiencing youth out-migration as French-speaking youth leave their communities to pursue post-secondary education in urban areas. H. Witnesses’ views on solutions for the employment challenges faced by particular groups of youthThe Committee’s witnesses proposed a number of solutions that they feel would enhance the employment prospects and conditions for Aboriginal Canadian, disabled and French-speaking youth who reside in communities where French is the minority language. 1. Training for Aboriginal Canadian YouthThe Committee’s witnesses mentioned additional investments in Aboriginal education and skills development as a potential solution to the unemployment of Aboriginal Canadian youth. The Assembly of First Nations suggested that the Aboriginal Skills and Employment Training Strategy should be renewed in order to meet the growing demands by First Nations youth for skills training. Moreover, in its brief submitted to the Committee, the Battlefords Agency Tribal Chiefs identified programming that would assess the skills of the individual, and then provide appropriate training and employment services. Its brief also requested long-term funding for training, and for support for individuals aged 18 to 24 who have low income and who are not receiving income assistance. In its brief submitted to the Committee, the Joint Economic Development Initiative argued for continued federal support for internship and mentorship opportunities, and the Workplace Essential Skills program; it also advocated changes to the program to allow collaboration with partners. Regarding new programs, the brief suggested that the federal government should consult and collaborate with Aboriginal partners, the private sector and provincial governments to identify current labour needs and solutions, and that the federal government should support not-for-profit organizations so that they can provide solutions to their clients. 2. The Transition into the Labour Force for Disabled YouthIn speaking to the Committee about the need to assist disabled youth transition from education to the workforce, the National Educational Association of Disabled Students requested a specific investment to support disabled youth aged 18 to 30 as they transition from school to work. In its brief submitted to the Committee, the March of Dimes suggested the creation of a community-based transition-to-work program that would provide life, work and vocational-related skills; those with a disability could share a transitional vocational plan with adult employment service providers. To ensure that disabled youth have job experience, the Neil Squire Society – in its brief submitted to the Committee – called for the funding of paid employment for disabled youth in high school, after high school and after post-secondary education. Witnesses noted that disability supports are a factor in helping disabled youth gain and retain employment. In its brief submitted to the Committee, the Neil Squire Society advocated additional employment-related support for disabled individuals, while Career Edge proposed increased efforts by employers to accommodate disabled employees. Finally, the National Educational Association of Disabled Students requested additional support for the Skills Link program to assist youth with disabilities, and for the federal, provincial and municipal governments to encourage the hiring, retention and promotion of persons with disabilities across all sectors of the Canadian economy. 3. Francophone Organizations and Eligibility for Government ProgramsThe Fédération de la jeunesse canadienne-française told the Committee that certain federal employment programs limit eligibility to private-sector employers that do not receive any public funds, and urged the federal government to expand eligibility to include – as employers – community organizations in communities where French is the minority language. |
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