Alex Paterson & Claude Dumulon-Lauziere
Opinion: It’s not unemployment, it’s underemployment
August 30, 2013
(A version of this commentary was published in the National Post on August 30th, 2013. Photo credit: Darren Calibrese / National Post)
There are a lot of different ways to describe the period after a young person graduates from their schooling, but increasingly in Canada, one word sticks out: underemployed.
It’s a somewhat slippery concept, and an even harder one to prescribe policy around, but efforts have been made by various banks and other international bodies to track and measure underemployment. The OECD has assigned it a relatively formal taxonomy: visible underemployment, where an individual is working less than they would like; and invisible underemployment, where an individual is not working in a field or position that matches their capabilities or skills.
But the more compelling story goes like this: As short as 20 years ago, our combined attainment of education, work experience, and connections would place us, and many other young Canadians, on a secure career track that would allow us to pay back our loans, save for a house, and contribute to the overall productivity of this great country.
Today, that’s more or less not the case, and an increasing number of young Canadians are caught in a veritable limbo state: educated enough to work a skilled job given the opportunity, but either not working as much as they want, or nowhere close to the field that would exploit their full potential. The glibber among us call it the rise of the B.A.rista
Now typically when we talk about policies for youth, the conversation focuses on unemployment – on ensuring everyone at least has a job. And that’s understandable, if mostly unrealistic: new job numbers released last week by Statistics Canada tell us the youth unemployment rate sits at 13.9%, double the overall unemployment rate. Furthermore, job creation for Canadian youth is slowing to a halt, less than 1% of jobs created since 2009 were for this demographic. And while that’s nothing to be proud of, it is actually an improvement from other post-recession periods – where the unemployment rate stood at 19.2% in 1983, 17.2% in 1993.
We feel the more telling story lies elsewhere. In the pre-recession hey-day of 2005, the CGA Association of Canada found that 24.6% of young Canadians were underemployed. We must ask why.
This is not to say that youth unemployment is not a problem. It most certainly is. And it is also not to sound entitled, selfish, or declare a war on hard work – all criticisms routinely lobbed at millennials. But we need to start asking better questions about the work today’s youth doing, and the skills they acquire: if you have a job, is it a good job that matches your skills? If you do not have a job, how can you get past survival and into the right job?
Concern about opportunity for Canadian youth is bubbling up in some form or another across the country: individuals not yielding a sufficient enough return on their education, students caught in low-quality job traps, skilled graduates taking unpaid internships well into their twenties, firms coping with skilled labour shortages and mismatches, parents generally fretting their children will be unable to build a better life on their own, Gen-Yers feeling resentful towards older generations, and baby boomers looking on young generations as entitled and lazy.
As this mixture of tension and unease brews, real labour market problems are taking root. A young, underemployed Canadian will never make up for lost earnings and stunted career growth, will struggle to repay student debt, save for a house and prepare for retirement. That’s not to mention the impact on the Canadian economy of weaker consumer demand, loss of tax revenue and a slower housing market.
Although the policy options may not be very different to unemployment, we must make sure that they are inclusive of young Canadians facing underemployment.
A good place to start is focusing on tactics to better inform young people about the opportunities available to them. The U.S. has made some headway with President Obama’s new college scorecard initiative through which colleges must disclose information about value, affordability and career placements of different majors.
Second, employers must invest in young graduates that are stuck in the vicious cycle where they have no job because they have no experience because, again, they have no job. The Conference Board of Canada found that Canadian employers have reduced their investments in training by 40% since 1993. Higher education does not necessarily equate job readiness and employers are needed partners on the bridge from education to employment.
In the long run we must face the daunting task of restructuring our education system. Higher education institutions must be more in tune with the needs of students, employers and the labour market. When it was deemed Canada should embrace a “knowledge economy” in the 90’s, thousands of Canadians pursued higher education. Now the pendulum has swung the other way, with calls for Canadians to rush skills trades, most certainly flooding colleges and apprentice programs. Our policy approaches have been overly reactive, sewing consequences generations down the line.
Yes, many young Canadians can get a job – but do they have the right job? As young Canadians trying to succeed, to contribute, and be productive members of society, we do not think it sounds entitled to simply ask.
Opinion: Why the US and Europe must stand together
President Obama’s trip to Europe is an opportunity to build on the vision he outlined in his West Point speech last week, and to set out a plan to renew the transatlantic relationship. This backbone of an alliance of liberal democracies across the globe, and the foundation of the post-war order, faces fresh challenges today. Over the past few years, though, this alliance has suffered from neglect which is troubling, as the inexorable triumph of liberal democracy is not inevitable – it requires constant work and vigilance.
Global Progress: Making Progressive Politics Work
“Making Progressive Politics Work: A Handbook of Ideas” is a collection of essays from the organizations and thinkers that are a part of Global Progress, an international exchange of ideas that will fuel the creation and implementation of progressive policies around the world. The handbook, organized and published by the U.K.-based Policy Network. Divided into two sections – Future Wealth Creation, and Jobs, Wages and Skills of the Future – the publication is required reading for Canadian progressives.
Analysis: Who is Matteo Renzi?
At just 39 years of age, Matteo Renzi became Italy’s youngest-ever prime minister in late February. The dramatic events that led to this meteoric rise are nothing new for Renzi. Over the course of his relatively short political career, the former lawyer and regional counselor earned the nickname “il Rottomatore”—meaning “the bulldozer” or “the demolition man”—thanks to his reputation for taking on the establishment and pushing through political reforms.
Opinion: It’s not unemployment, it’s underemployment
As short as 20 years ago, our combined attainment of education, work experience, and connections would place many young Canadians on a secure career track that would allow us to pay back our loans, save for a house, and contribute to the overall productivity of this great country. Today, that’s more or less not the case, and an increasing number of young Canadians are caught in a veritable limbo state of underemployment.
August 15, 2013
Summer Reading: 10 infographics you should see
We love infographics at Canada 2020 – and there’s no better time to browse and read them then over the long summer office hours.
Here’s 10 online features from The Guardian, The Economic Policy Institute, The White House and more than you should catch up on. Topics include tracking and comparing national carbon outputs, measuring exactly how inequality is rising in North America and answering what makes Canadians sick.