Youth unemployment could have long-term consequences, StatsCan warns

By Staff, with files from The Canadian Press | July 28, 2020 | Last updated on July 28, 2020
2 min read
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The unemployment rate for young people has soared during the Covid-19 pandemic, from 10.3% in February to a historical high of 29.4% in May. A study from Statistics Canada says the consequences for this year’s graduating class could be long term.

If this year’s annual unemployment rate for 18- to 24-year-olds reaches 28%, the study released Tuesday said, students who graduated high school, college and university undergraduate programs could lose between $23,000 and $44,000 over the next five years. That’s the equivalent of $4,600 to $8,800 per year.

The historical high for youth unemployment was 19.2%, set in 1983. If this year’s rate reaches 19%, the study said, earnings losses would be about $8,000 to $15,000 over the next five years, or about $1,600 to $3,000 per year.

StatsCan also examined a scenario where the youth labour market recovers quickly. If the youth unemployment rate hits 16% this year, five-year losses could be less than $6,000 for all groups, or less than $1,200 per year.

Under any scenario, the study warned that women who graduated from university this year may face larger earnings losses over five years than men.

“For example, if this year’s youth unemployment rate is 28.0%, female bachelor’s degree graduates may lose $43,674 over a five-year period, compared with $27,887 among their male counterparts,” the study said.

The pandemic is disproportionately affecting women of all ages. An RBC Economics report released earlier this month said the pandemic has reduced women’s participation in the workforce from an all-time high to its lowest level in more than 30 years.

On Tuesday, YWCA Canada and the Institute for Gender and the Economy at the University of Toronto’s Rotman School of Management released a report calling for a “feminist economic recovery plan.”

While the discussion around economic recovery has been focused on the so-called new normal, the authors said Canada should not return to “normal” policies if those policies perpetuated inequality.

For example, the report noted that in the midst of the pandemic, the employment rate declined twice as much for Canadian women in the 25-to-54 age range compared with men.

The report also said that Black, racialized and immigrant women are more likely to be personal support workers, cleaners, and work in other “essential but low-paid occupations” that lack leave policies.

The report urged governments and, to a lesser extent, businesses and charities to consider eight policy goals that address systemic racism, emphasize good jobs, protect victims of domestic violence, improve funding for small businesses, and promote diversity in the decision-making process.

Those measures will in turn stimulate the economy, the report said.

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Staff, with files from The Canadian Press

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