The COVID-19 pandemic hit the Canadian employment sector hard. But as vaccination rates rise and workplaces begin to reopen, the question is, what long term effects will the pandemic have on Canada’s unemployment—especially youth unemployment?
The Ontario Government reported that in the first quarter of 2021, employment declined for all age groups compared to the same quarter last year. Youth aged 15 to 24 saw the largest loss of employment with a decrease of 8.6 percentage points, followed by workers aged 25 to 54 with 1.2 percentage points.
Ontario’s unemployment rate in the first quarter of 2021 (9.1 per cent) was also higher than Canada’s rate of unemployment (8.8 per cent).
“We have seen that young people aged between 18 to 24, specifically new graduates, are facing multiple shocks during the pandemic,” says Behnoush Amery, senior economist at the Labour Market Information Council. “In some literature they have been called the lockdown generation.”
The Royal Bank of Canada’s (RBC) Future Launch program conducted a study in March 2021 on 1,800 Canadians between the ages of 14 to 29. The study found that more than half of young working Canadians have experienced job interruptions such as reduced hours or termination. Additionally, 47 per cent of youth working full-time are doing so from home.
This rise in job losses for young adults and the lack of employment opportunities for recent graduates can also have long-term effects.
“These young people that enter the labour market during a crisis, it really has long term effects on their career,” says Veerle Miranda, an analyst from Organisation for Economic Co-operation and Development.
Many young workers are accepting jobs for lower wages, have less opportunity for promotion or are unable to find jobs altogether. Miranda said these factors could negatively impact their careers in the future, at least for a few years.
A study conducted by Stanford Institute for Economic Policy Research in 2019 examined the long-lasting effects that the 2008 financial crisis had on “recession graduates.”
“Negative impacts on socioeconomic outcomes persist in the long run. In midlife, recession graduates earned less, while working more. And they were less likely to be married and more likely to be childless,” the study states.
21-year-old Emily Gadjimousiev has experienced the tumultuous pandemic job market first-hand. With her graduation around the corner from the criminal justice and public policy program at the University of Guelph, Gadjimousiev has been actively looking for jobs in her field and has even expanded her search to other sectors she may not have thought about prior to the pandemic.
“I’ve considered lots of administrative positions and even [Human Resources], stuff that can be done remotely because I know that they need that right now.”
In a way, Gadjimousiev found the pandemic has opened her horizons to other jobs. “I feel like COVID is better for that, because it is making me consider other options,” she says.
But so far she has not had an official interview, only a couple of phone calls. She has continued to build up her resume and is contemplating furthering her education in the hopes of enhancing her chances of landing a job.
Gadjimousiev isn’t the only one struggling to land a job or even an interview. She says her friends have also had a hard time finding full-time employment and are sticking with the minimum wage jobs they worked throughout school.
“Those who have recently graduated come into the labour market at a time when there are very limited vacancies available,” Miranda says. “These young people that enter the labour market during a crisis, it really has long term effects on their careers, both on employment and income.”
Miranda and Amery both agree that the Canadian government needs to continue to provide opportunities for young people in order to ensure the economy recovers from the pandemic. “If we want our new graduates to be successful in the new future of work, we have to make sure we provide them with the opportunity to re-skill and up-skill,” Amery says.
The Canadian government has provided incentives for companies to hire interns and recent graduates. Businesses can receive 50 to 70 per cent of an intern’s wage (maximum of $5,000-$7,000), and similar grants for hiring recent graduates.
These grants and wage subsidies given to employers help create jobs for young Canadians and in turn, allow them the opportunity to gain hands-on work experience.
“It is really essential to keep youth engaged with the job market.” Amery says.