Recession? Ask the youth

In many parts of the world, young people are happier than their elders. After all, they have health and years ahead of them.

But in Canada it is completely opposite.

In our country, the young are not happier than the old. Very little. According to the World Happiness Report, the gap, which has widened since 2010, is the widest in the world. Canada is ranked 8th^e Status for 60 years and above. But he slipped to 58^e Ranking for youth under 30 years¹.

Is it right for young people to get morale in a recession? Looking at the unemployment rate, yes.

Zs have been hit hard by the slowdown in the job market. After the pandemic, the generation born between 1997 and 2012 may have felt entitled to employment because employers didn’t have much labor.

Today, Z’s are struggling to find work, as confirmed by figures released by Statistics Canada on Friday.

In July, the unemployment rate reached 14.2% for 15- to 24-year-olds, an increase of 4.9 percentage points compared to the summer 2022 low. The unemployment rate reached 21.3% for immigrant youth aged 15 to 24, rising to 14.2. % in last two years.

As National Bank economists point out in a special study, the youth unemployment rate has risen at a pace seen only during the recent recession.².

So what’s going on?

Those trying to enter the job market face a hiring freeze. But the current difficulties facing job seekers may be the canary in the mine. Vacancies in companies have melted. And there is surplus staff in many departments. Therefore, it is not surprising that layoffs affect the population as a whole.

But back to the youth…

Some people say they always get hit the hardest when the job market tightens. Yes, but not like today, explain Royal Bank economists in a recent podcast³.

In fact, 80% of the decline in the unemployment rate for the general population has been absorbed by young people under the age of 35. It’s too much!

During the credit crisis of 2008 and the recession of the early 1990s, young people suffered 50 to 60% of the losses.

The situation is very serious as young people face long-term consequences in their lives. According to DD Bank, history shows that it is more difficult for graduates to climb the ladder when the job market is tough, and the pay gap can drag on for ten years.⁴.

Nothing to reduce intergenerational disparities. There is nothing to improve the financial condition of the youth.

Already, inflation is hitting them hard, as much of their spending is devoted to essential goods, such as housing and food, which have seen more pronounced price increases, the Desjardins Group notes in a series of surveys of young people.⁵.

And good luck buying a home! The real estate market hasn’t been more unaffordable since the 1980s, although falling interest rates offer some hope.

We see, young people are stuck.

In its last budget, the Trudeau government tried to restore intergenerational equity … and appeal to the young people who brought it to power in 2015, but who are in the process of migrating to the Conservative Party.

Ottawa has released billions to spur housing. Very good. But it will take years to bring real estate back down to earth.

Meanwhile, we need to slow population growth, which will increase by 1.3 million people in 2023, the fastest increase (+3.2%) since 1957. The Central Government is committed to reducing temporary migration. A good thing. We are doing no one any favors if the youth and migrants cannot find shelter and employment.

What more can we do for young people?

• Take the necessary steps to achieve our greenhouse gas reduction goals because the climate crisis affects their future.
• Investing to restore Canada’s productivity to improve the quality of life for future generations.
• Make sure young people have the training they need to benefit from advances in artificial intelligence.
• Keeping our public finances in order and addressing the deficit in maintaining public infrastructure is a hidden debt we owe our children.

Whatever the means, intergenerational equity should be a beacon guiding all our public policies.

2. Read the National Bank Study

3. Listen to Royal Bank Podcast (in English)

4. Read the TD Bank Analysis

5. See a study from Desjardins Movement Series on Youth