Canadian
In recent months, weakened, with
Having reached 7.1 percent in August, its highest level since 2016. The situation is even worse for young people. In July, the level of unemployment for this cohort of workers was the highest since the beginning of the 2010s in July.
If not for many young people were probably not encouraged by their prospects that go out of labor, with the level of participation of this cohort, reaching minimums that have not been observed since 1998, their unemployment rate will be closer to 18 percent.
Most unemployed young people, as a rule, reach a lower level of education – secondary school diplomas or less – but the unemployment rate for owners of university degrees reaches levels without observing the recession of the 1990s.
Recent data on vacancies vacancies indicate the number of unemployed people for a job, requiring the degree of university, significantly higher than in other categories, which suggests that new graduates are faced with a hard labor market.
What explains the weakening of the youth labor market and what are the consequences?
The level of unemployment is the result of the weak
From the modest economic growth. As such,
In the economy, there was low, while a strong population growth in recent years has led to a surge of labor market participants competing for fewer discoveries.
In addition, while dismissal remains low for younger cohorts, they were also the first to affect the implementation of hiring freezing. As a result, an increase in employment for young cohorts is under the lag.
Many accuse foreign temporary workers of a high level of unemployment among young people. However, although, according to the visible, there is a correlation between the growth of unemployment among young people and the growth of temporary foreign workers, it is important to take a more holistic view of the labor market before drawing such conclusions. The level of unemployment for recent immigrants has also increased over the period, and the inconsistency of labor can also play a role.
The hypothesis that the growth of inconsistent residents is the reason for increasing unemployment among young people will soon be subjected to the test, since the number of inconsistent residents will quickly decrease and, as expected, will continue to do this in the next quarter.
(AI) also affects the current situation. In a recent report on the organization for economic cooperation and development (OECD), it is said that young workers are more at risk of being supplanted automation, since their jobs are more likely to include routine and/or repeated tasks.
This trend can be accelerated in the current complex macroeconomic environment, since enterprises can strive to save on costs by accepting AI, not hiring. Losses of work from artificial intelligence are similar to the fate of weavers in the United Kingdom during an industrial revolution or North American jobs in the face of globalization.
While industries violated by new technologies will have fewer jobs, profit will be reached in other areas, and the net effect will probably lead to an increase in work. But it also creates the winners and losers, aggravating inequality between those who win or adapt to changes, and those who do not do this.
The consequences of increased unemployment among young people will be called the “scar”. Many studies came to the conclusion that people involved in labor during the recession have a tendency to have income, which is about 10 percent lower compared to those who hire in “good times”.
What is even more alarming is that this gap remains for most of their career. Lower income not only due to the lower input level of the entry; Often this is the result of the adoption of jobs for which they are overestimated or in different areas, which leads to the transition to a lower paid industry.
A weaker income at the early stage of their career, in the context of current problems with the price of life and accessibility, means that many young people will have to postpone the following steps in their lives, such as leaving their parents' home, buying a house or creating a family.
As a result, people who enter into labor during a recession experienced deferred advertising actions, reduced mobility in different opportunities and often see a reduced accumulation of wealth throughout the entire time.
If insufficient productivity of income is widespread, this can also have wider consequences for the economy.
As the age of the population and the share of pensioners increases, a large share of financing public services for younger generations increases. Long -term insufficient income will reduce the government’s ability to increase the income necessary for the provision of public services, which will potentially require higher taxes or reduction of expenses than otherwise.
We have seen a higher level of unemployment among young people after previous downs. Nevertheless, the current situation differs in that the young generation is simultaneously faced with additional problems. The risk is that the longer the situation lasts, the more the young generation will lose faith in its future and despair.
Despair and increased inequality, inside and between generations, are an explosive cocktail, which can lead to the fact that the generation has turned into radical answers to their economic problems.
History suggests that the labor situation will improve for young people, since economic activity will improve, but it can take years. Meanwhile, politicians will have to keep in mind young cohorts and accept politics so that the unemployed are not left behind and reoriented to contribute to society.
Otherwise, we could be at the risk of a lost generation.
Charles Saint Arno is the main economist in Central Albert.
