Economist points to deteriorating business sentiment, immigration, part-time work
The youth unemployment rate in Canada has recently soared, and one expert is pointing to workers from other countries coming to Canada as one of the reasons.
The overall unemployment rate for youth (aged 15 to 24) rose 0.9 percentage points to 13.5 per cent in June, according to a report from Statistics Canada (StatCan).
That number was the highest rate since September 2014, outside of 2020 and 2021 during the pandemic, according to the report.
On a year-over-year basis, the youth unemployment rate was up 2.1 percentage points in June 2024.
Deteriorating business sentiment among employers and the surge in newcomers are responsible for this trend, said Brendon Bernard, economist with Indeed Canada.
“It’s been driven by a surge of newcomers from abroad,” he said in a Financial Post (FP) report. “At a time when employer hiring appetite has been on the wane, we now have a surge of youth job seekers, and the demand isn’t there to keep up with the supply.”
Overall, there was little change when it comes to Canada’s employment numbers for the month of June compared to the statistics for May, according to StatCan.
Canada welcomed 1.3 million newcomers in 2023 overall, FP noted, citing data from StatCan. Meanwhile, the 15–24-year-old population cohort has grown by an estimated 335,700 people since last June.
Summer employment, entry-level jobs
Also, overall, job postings related to summer employment dropped this year compared to the past two years, according to Indeed.
“The temporary nature of these openings might help students on summer break compete for these positions. But it’s also a sign of the weaker situation facing job seekers overall, as some employers opt for seasonal workers instead of recruiting permanent employees,” said Bernard in that report.
There’s another trend that may be contributing to youth unemployment: employers are offering more part-time jobs over full-time positions, with many of those positions being filled by workers in older cohorts, said Tim Lang, president and chief executive at Youth Employment Services, in the FP report.
“Many organizations are opting for part-time offerings instead of full-time,” he said. “People who have more experience are getting a second part-time job [and] are knocking out youth who are looking for their first job or a summer job because the employers are opting to give it to people with more experience.”
This data suggests workers are stagnating in their positions compared to previous years.
“We’re seeing Canadians not change jobs as frequently as they were,” he said in the report. “This could be a sign of people in entry-level roles not moving up the job ladder as much as they were previously.”
Nine in 10 workers have felt stuck in their role, according to a previous Ceridian report.
