Youth unemployment is usually the 'canary in the coal mine' for deeper economic issues...
Gen Z is facing the worst youth unemployment rate in decades. Here is how it's different
Youth unemployment a 'canary in the coal mine' for broader labour market troubles
The Canadian labour market has endured a kind of whiplash in recent years.
After pandemic-era restrictions were lifted, companies celebrated with a hiring spree — the economy
regained jobs it lost during the crisis and Canadian youth reaped the rewards of
a summer job boom.
But employers were soon struggling to find workers and
fill postings, a result of the workforce
having shrunk during the pandemic. The federal government and public policy experts prescribed higher immigration as
an antidote to
the shortage, which led
to a rise in the Gen Z and millennial working population.
Hiring sentiment "was really high coming out of the pandemic, which probably was never going to last," said Brendon Bernard, a senior economist at Indeed who closely follows youth labour market trends.
As the hiring backlog cleared, other conditions started to slow the economy down, he added.
The onset of a fierce inflation episode in mid-2021 triggered a domino effect: consumers pulled back on spending and the Bank of Canada began an aggressive interest rate hike cycle, leading businesses
to delay hiring as economic confidence deteriorated.
Older workers started working second jobs to pay the bills during the affordability crisis. Some experts suspect that the automation of routine tasks could be leading to fewer entry-level opportunities, but there isn't enough data to say how widespread this is.
"As things have turned back and employer appetite has fallen back down to earth, the youth employment situation has weakened," said Bernard.
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