The employment crunch is hitting young people hard

The employment crunch is hitting young people hard
The employment crunch is hitting young people hard

The job market has been tightening for a year and it is especially young people who are the victims. The unemployment rate for those aged 15 to 24 reached 12.8% in April, Statistics Canada reported, its highest level since July 2016.


Posted at 10:13 p.m.

At 12.8%, the unemployment rate for youth aged 15 to 24 is more than double the average unemployment rate in Canada, which was 6.1% in April, unchanged from March.

The situation is similar in Quebec, where young Quebecers who want to work this summer will have more difficulty finding a job. The unemployment rate in Quebec increased by 0.1% in April, to 5.1%. Among young people aged 15 to 24, the rate rises to 9.5%.

The slowdown in the economy has an impact on the entire job market, but young people are often the most affected.

Emna Braham, economist and principal director of the Institut du Québec

It is particularly difficult this year for this age category, according to her. Jobs that do not require the specific skills that young people are looking for are found in the sectors that are suffering the most from the economic situation.

This is the case in retail and accommodation and food services. Several companies in these sectors have disappeared and others have reduced their workforce. “This is where the number of vacant positions has fallen the most in a year,” she specifies.

In the accommodation and catering sector, for example, there were some 10,000 fewer vacancies at the end of 2023 than in the previous year.

More competition

There are fewer jobs available, but also more candidates wanting them. Jobs that require few skills, such as those that young people generally occupy, are also sought after by newcomers, whether they are students or temporary residents.

And these newcomers are more numerous than ever. In Quebec, the population in general made a historic jump of 2.1% in 2023, but in the 15 to 24 year old group, the increase is even greater, at 3.9%, according to official figures.

“Young people are arriving in a more competitive job market than in recent years,” says Emna Braham.

For those looking for a first job and not a summer job, the consequences can be significant. “Research shows that young graduates who enter the job market during a recession suffer significant losses of income which can last several years after the end of their studies,” according to the Institut du Québec.

A surprise leap

Despite the addition of 19,000 jobs in April, the job market is far from vigorous in Quebec. Population growth continues to outpace employment growth, notes Desjardins economist Florence Jean-Jacob.

If the unemployment rate remains relatively low, at 5.1%, it is because “companies apparently prefer to reduce vacant positions rather than layoffs, especially when qualified and specialized labor constitutes a rare resource in several sectors,” she believes.

The number of jobs made an unexpected jump of 90,000 in April in Canada, while economists who track the labor market expected a modest increase of 15,000. This is the largest increase in employment to Canada in 15 months.

In Quebec, there were 19,000 more jobs in April, the first significant increase in employment in Quebec since September 2023.

The jobs that were added in April were mainly created in the private sector, and they were mainly part-time jobs, indicates Statistics Canada.

Employment increased in the service sector, namely professional services, accommodation and food services, and health care. The number of hours worked was up 0.8% in April. The average hourly wage continues to increase, but at a slower pace. After an increase of 5.1% in March, the average hourly wage increased by 4.7% in April.

For the Bank of Canada, the better-than-expected employment report in April adds to the complexity of its next decision, scheduled for June 5. Several economists, including those at Desjardins, are of the opinion that the central bank will then announce an initial reduction in its key rate.

“Inflation data for April 2024, which will be published in two weeks, will be a key factor in achieving this forecast,” estimates Marc Desormeaux, senior economist at Desjardins.

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