Thank you.
Thank you for having me here today. I enjoy the opportunity to speak with you.
In the March 6 meeting of this committee you heard from René Morissette and Alison Hale, from Statistics Canada. They are highly respected researchers so I see no need to replicate any of the information they provided to you.
An important point to take away from their presentation is that youth employment differs substantially by gender and by region.
Today I'd like to break down the data a bit more for you. In particular, I want to describe what youth are doing if they are not working full time, and the extent to which policy-makers should be concerned about youth having difficulties in the labour market. I also want to address whether youth today are finding it more difficult than previous generations. Finally, I will mention some policies that I think require further scrutiny. I have to be very brief here but I have provided many details in my written brief to the committee.
What are youth today doing with their time? I looked at young people surveyed by Statistics Canada in the 2012 and 2013 labour force surveys and categorized their activities. Over three-quarters of young people 17 to 21 years old are doing exactly what I think most parents hope their kids will do after leaving high school. They are in school full time or working full time. Many others are working or going to school part time, and many have not yet entered the labour force.
I'd like to focus more on young people aged 25 to 29 years, because this is the group we expect to be more attached to the labour force. They're typically done with school and are establishing their careers and their families. The key difference between men and women in this age group is that the average woman is having her first child. With that in mind, I'm going to focus more on young men, who remain less likely to become primary caregivers while children are young.
Of men aged 25 to 29, 75% were working full time, and another 7% were in school full time in 2012 and 2013. In a more stable labour market in 2002 and 2003, 77% of men aged 25 to 29 were working full time, and 6% were in school full time. For comparison, 83% of men aged 35 to 49 were working full time in 2012 and 2013.
Young men were more likely unemployed than older men, which is not unusual. When unemployed, youth tend to have shorter jobless periods. Their unemployment rate in part reflects the same business cycle effects as for older individuals. In addition, people are leaving and finding new jobs as they establish their careers. Their unemployment is not exclusively a response to the most recent recession.
I have heard several concerns regarding youth unemployment statistics. First, people may give up their job search and return to school full time, in which case they are no longer considered unemployed. I don't think this is as large a concern here. The same percentage of 25- to 29-year-old men were in school full time in 2013 as there was a decade earlier in 2003.
Second, there is a concern that they have given up their job search and become discouraged workers, those who would like to have a job but do not search because they believe jobs are not available. Formally speaking, only 0.1% of men aged 25 to 29 would have been considered discouraged workers in 2012 and 2013, or roughly 1,000 people. It was the same in 2009, and in 2002 and 2003.
If we were to allow for those working part time and wanting full-time jobs, but did not look, and those not participating in the labour force while going to school part time, we might suggest that up to 2% of young men were discouraged in 2012 and 2013. Notably, this is not larger than in 2002 and 2003.
Third, the claim is made that young people are finding it more difficult to find secure and stable employment relative to generations past. I have only found evidence that contradicts this.
First, Dr. Pierre Brochu at the University of Ottawa has shown that job retention rates have actually increased for new employees since the mid-1990s and are recently at record highs. Second, it is clear that the opportunities available to any young woman today far surpass those of previous generations. Occupational gender segregation remains an important concern and has not changed enough over the past three decades; however, the gender gap in wages has narrowed considerably and the participation of women in the labour force continues to increase. Third, it seems that past recessions hit younger workers even harder than the most recent recession. Not only did youth unemployment rates reach much higher levels in the early 1980s, but young workers in the 1980s were hit much harder than middle-aged workers when compared to our most recent recession.
Overall, I don't think it's worth dwelling on intergenerational inequities in labour market experiences. I am concerned that the expectations of youth are often out of line with reality. Anecdotally, it seems that the majority of my students expect to complete their undergraduate degree and immediately find a secure job with a salary that would place them in the top 5% to 10% of Canadian earners. No doubt it takes some time for their expectations to adjust after leaving school.
In my last minute I would like to mention a few concerns for policy-makers.
First, it is clear that there is still a high return to post-secondary education, especially for women. As long as that return is positive, education is not wasted. Without clearly identified market failures, I am reluctant to recommend interfering with the skills market.
Second, over time we have developed an incredibly complex web of tax credits, transfers, and direct programs designed to help young people. For example, a young man with a child, who is considering an apprenticeship, will need to work through at least 18 tax and benefit programs to determine how best to proceed.
It is clearly time to assess and redesign our tax and transfer system to achieve greater transparency, and to simply make it user-friendly and easily understood. This assessment has not been done since the 1960s with the Carter commission. I strongly recommend this committee consider the value of a new commission framed with current and future Canadian family structures in mind.
With that, I thank you for your attention and I am happy to take questions.