Canada’s labour market needs massive shift

We should be paying attention to two recent headlines. The first is about the state of youth unemployment in Canada; the second is on Ontario's skills shortage costing billions. Lauren Friese is a champion for the so-called Generation Jobless that is stuck somewhere in between.

In addressing the two topics, the 30-year-old founder of TalentEgg, an online job board and career resource site, says the biggest source of stress for students and recent graduates is being overeducated and underemployed, and not landing the right job in an increasingly competitive job market that has been forever changed by technology and a new hiring model based on sporadic work.

That is a scary, basic worry, and the finding demands ongoing attention about the way Canada is educating and prepping youth for the labour force. Youth unemployment is close to 15 per cent, or roughly twice that of the general population. Of increasing concern are the underemployed people, who scraping by even as they face crushing debt from their school days. Change can happen, but there needs to be a major attitude shift.

That concern was most recently outlined in a CIBC report published last week that suggested young Canadians are more educated than ever, but are facing challenges their parents didn't, and are increasingly struggling to find lasting and meaningful jobs. About 420,000 youth aged 15 to 24, or nearly one in 10 young Canadians, are neither in school or in the labour market, the report by Benjamin Tal, the bank's deputy chief economist, found.

At the same time, the Conference Board of Canada issued a report late last week that suggested the mismatch between companies’ hiring needs and workers’ skills is costing Ontario alone more than $24.3-billion in lost economic activity. On top of that, the gap appears to be costing the province $3.7-billion annually in potential tax revenue.

Trades vs university

Where did the system go wrong? For starters, many of us have had the wrong attitude. Young people are told to go to school, go to university and they'll get a job. "For a large proportion of the student population it is not a reality," says Friese. "I felt like I had been led down a beaten path and then suddenly it ended."

In fact, the Conference Board report shows there is hearty demand for people with skilled trades and diplomas rather than university degrees or other advanced training. It showed 57 per cent of employers said they needed workers with two- or three-year college diplomas, 44 per cent needed people with four-year university degrees and 41 per cent were seeking workers with specific trades training.

So the branding of these jobs, especially ones in trades, needs an overhaul. Who can blame a generation of kids who didn't choose the trades if all they were told was skilled trades were not as good, or not as prestigious, compared to a "white collar" office job. The sad part is that the trades may have very well matched some people's personal attributes quite nicely.

So a huge, collective attitude adjustment is needed and the trades or other diplomas must be given the respect they deserve. We've all heard the quips about people wishing they went into the trades as opposed to going to university, and it appears to be showing up in the numbers. In a 2012 progress report, Ontario said there are 120,000 people learning a trade today, or 60,000 more than in 2002-03.

Another key issue is that there is a trend toward part-time and temporary contract work. The reasons businesses do this is obvious, ranging from their own uncertain outlooks to simply keeping costs low. (Think corporate and government restructuring and downsizing, technology and outsourcing). Add to the mix the fact that the Boomer generation and others, who have full-time work, are also staying in the work force longer and you've got a recipe for never-ending anxiety.

"Everybody has got this sort of uneasy feeling that their kids are not going to do as well as they have. This is a first. This is the first generation of parents that feel that way," says Armine Yalnizyan, a senior economist with the Canadian Centre for Policy Alternatives. "These aren't challenging things to fix, but they do require a cultural consensus that we're heading the wrong direction."

Roughly one in three youth are doing short-term, contract and temporary work, up from about a quarter in the mid-1990s, says Yalnizyan. If the dynamic continues on this track, the situation can only get more troubling.

Closing the gap?

Whether the jobs mismatch gap can be closed easily and quickly remains to be seen. That will depend very much on how students, policymakers and businesses proceed. For now, though, Friese's experience matters.

She knows well the challenge transitioning from school to work. After her undergraduate degree, like many of her cohorts at the time, she opted for graduate school. She enrolled in the prestigious London School of Economics, stressing she basically applied "out of fear."
"That is something that a lot of young people do and statistically it's a bad decision because your employability is actually the same or less with a graduate degree with no work experience," says Friese. "These are all things I've learned now."

She carved a different path for herself in 2008 by launching TalentEgg. Through her work now, Friese has countless conversations with employers who hire young people and also gets a ton of feedback from students and recent graduates about their job searches and experiences.

But before dismissing those experiences as whiny and indicative of a lazy bunch of Generation Zs and Ys, the point is Friese is a passionate ambassador for youth today. They have something to say and we should listen. We should meet them part way.