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Gap between youth, adult unemployment rates hits record high

Fin - Balance Sheet - CA

Today’s youth may be more pampered than previous generations, but when it comes to landing a job they really are worse off, a new report shows.

Statistics Canada says the unemployment rate for youths between ages 15 to 24 was 14.3 per cent in 2012, which is more than double the rate of 6 per cent for workers age 25 to 54 and for those 55 years and older.

And it's getting worse for today’s young people. The gap between the youth and adult unemployment rates has been steady since 1990, and increased slightly since 2010, StatsCan says.

“A significant gap between the unemployment rates of youths and adults have been observed every year since 1977,” StatsCan said in the report released Tuesday.

The data isn’t entirely surprising given that young people have less experience in the workforce and could be first to be laid off in a restructuring. What’s more, many young people are still figuring out their career paths, and could be leaving jobs to go back to school or pursue a different profession. The other reality is that there aren't many 15-year-olds that hold down jobs these days, or teenagers in general.

Still, the results show that 2.6 per cent of young people aged 15 to 24 that were working in a given month were unemployed the next month. That compares to 1.1 per cent of workers in the 25-to-54-age group.

Layoffs are the biggest contributor to youth joblessness. StatsCan says the average monthly layoff rate among youth was 3.5 per cent in 2012; nearly three times that of those in the 25-to-54 category.

The good news is that the more seniority a worker has at a job – not matter what the age group – the less the chance of a layoff.

The even better news for young people is that they’re more likely to bounce back from a job loss.

The report shows nearly 80 per cent of youths who became unemployed in 2012 were back working three months later. That compares to about 67 per cent of the adults.

That stamina was evident in the recent jobs data released last Friday, which shows 54,400 more young people found work in April. The participation rate of young people in the job market also increased to 64.6 per cent from 63.8 per cent.

“While some may argue that youth is wasted on the young, a long-awaited surge in jobs is certainly not,” noted Emanuella Enenajor, an economist with CIBC World Markets.

“Some of the pick-up in employment could signal a temporary boost over the next few months on a strong summer hiring season. Conversely, the gains could point to a more long-lasting improvement as recent graduates are able to find work.”

Still, Enenajor noted the youth jobless rate is still high at 13.6 per cent, “well above pre-recession levels and more than double the average for older workers.”