As the school year winds down, many students are preparing to leave university and become financially independent members of society. Many, however, are finding that their prospects of doing so are disappointingly slim — perhaps more so than those of any other generation of young people in recent memory.
Canadian students graduate with an average of $14,000 in debt ($25,000 if you exclude students who graduate with no debt at all), the highest debt ever, adjusted for general price level changes over time. According to the Canadian Centre for Policy Alternatives (CCPA), a left-leaning political think tank, 2013 unemployment of people aged 15 to 24 ranged between 16 per cent and 17.1 per cent, compared to the Canadian average of 13.5 to 14.5 per cent. Ontario’s youth employment rate — arguably a more telling statistic because it includes individuals who have given up on looking for work — hovered between 50 per cent to 52 per cent that year.
A number of experts offer detailed arguments on why this could be the case. “If you look at wages overall, there’s been a stagnation for wage levels in Canada for the most part, particularly among young males,” said Andrew Langille, a lawyer specializing in workplace law and intergenerational equity. He listed possible causes for this, including competition from migrant workers, outsourcing, and poor government policy at both the provincial and federal levels.
“Unemployment rates were higher in the 1980s for youth than they are now; in fact, they were also higher in the 1970s,” began Armine Yelnizyan, senior economist for the CCPA. However, she points out that these statistics are misleading. The higher numbers were due to the massive influx of women into the labour market during those decades. Those women were “unemployed” as they began looking for their first job in an economy that did not yet typically offer them work. Note that unemployment rate only counts an individual as unemployed if she both does not have a job and is actively looking for one.
“How your generation is different from your parents’ generation is the competition is now coming from migrant labour, so now we’re pouring in temporary foreign workers into the mix,” continued Yelnizyan. “Another thing that is new is, in unionized work forces, when bargaining takes place, employers are saying to their employees ‘If you want this job you need to accept a wage roll-back,’ and when they push back, they say ‘Okay, you’re left untouched, but future hires will have lower wages, lower benefits, lower pensions.’” These circumstances have led to an environment that has fewer jobs for incoming labourers and leaves those that remain with lower pay and benefits.
Both Langille and Yelnizyan emphasize that one of the most notorious effects of this environment is the phenomenon of the unpaid internship. Employers are able to take advantage of an additional barrier to entry before offering people paying jobs, because competition for them is so fierce. Therefore, after paying historically high tuition fees for four years or more, would-be employees must spend time earning “experience” while being unable to support themselves in order to become qualified to work. This issue recently ran into an intriguing development.
Last week, Ontario’s Ministry of Labour shut down unpaid internship programs at The Walrus and Toronto Life magazines. “From what I gather, this is going to be the start of a wider enforcement campaign around the issue of unpaid internships in Ontario,” said Langille. “There was a Ministry of Labour official quoted yesterday saying that, come April 1, and going into the summer, there’s going to be a wider enforcement campaign around the issue of unpaid internships in Ontario.” Langille praised the work of many activist groups who have lobbied the ministry to begin this effort, including U of T’s Students Against Unpaid Internships and the Canadian Federation of Students (CFS).
Broadly, however, there remains much that governments are not doing. Canadian federal and provincial governments spend an average of $45,000 per citizen over the age of 65, and only $12,000 on those under 45, according to Dr. Paul Kershaw, a professor at the University of British Columbia (UBC) School of Population and Public Health and founder of Generation Squeeze, a campaign aimed at increasing government spending on young Canadians.
“While governments use this wealth to adapt policy for others, including our ageing population, they continue down a path that leaves little left over for younger generations. For example, the 2014 federal budget phases in an extra $11 billion in annual spending on retirees, compared to a small fraction of this increase for all Canadians under age 45,” said Kershaw.
Yelnizyan entreated citizens to lobby their representatives with specific recommendations for policy changes: “We’ve spent billions of dollars of foregone revenues on things like the tax-free savings account and income splitting,” she said. “The reason they’re doing what they’re doing is that the people who benefit from these programs that are being introduced are in their face. Bay Street wins when we do income splitting. Bay Street wins when we do tax-free savings accounts.” Younger citizens, she continued, must work to lobby governments as much as society’s most affluent groups do.
“Young people kind of shrug their shoulders and say ‘Eh, politics, it sucks,’” she said. “You don’t get involved. That’s perfect for the people that are winning. They don’t have to compete with any ideas on how public resources should be spent.”
Langille added a similar take: “These issues, be it housing, the lack of affordable childcare, be it tuition, be it youth unemployment, youth underemployment, any one of these issues, they have policy solutions that are available that aren’t being utilized right now,” he said. “So I think it’s really incumbent upon young people to get involved and ask the tough questions about some of these issues.”
