Youth Bear Brunt Of Job Losses

Youth bear brunt of job losses
Canada's student unemployment rate hits almost 21 per cent in July, the highest on record

Virginia Galt
Globe and Mail Update
Last updated on Friday, Aug. 07, 2009 04:46PM EDT

Twenty-year-old Siva Vimal, frustrated by the worst summer on record for student job seekers, is stressed about how he will pay his tuition this year and reconsidering his dream of studying international law.

Because we are in a recession right now, even if I do manage to find a job[], I'm only getting three to four hours a week, Mr. Vimal, a third-year political science student at Toronto's York University, said in an interview Friday after Statistics Canada confirmed the grim reality affecting Mr. Vimal and other cash-strapped students across the country.

July's student unemployment rate[] climbed to 20.9 per cent, a 7.1-percentage-point increase from July, 2008, Statscan said. This was the highest July unemployment rate for these students since comparable data became available in 1977, Statscan reported.

The July unemployment survey found the two sectors that traditionally hire students in the summer hospitality and construction were particularly hard hit.

For Mr. Vimal, the lack of a full-time summer job means he is going to be forced to take on an oversized debt. He already owes $11,000 in student loans[].

Although total employment declined by 45,000 in July, with losses in both full-time and part-time work, the unemployment rate remained unchanged at 8.6 per cent. Young Canadians, and students in particular, bore the brunt of the job losses.

No one said it was going to be a smooth recovery, especially not for employment, Bank of Montreal[] economist Douglas Porter said in a research note.

If there is any positive spin here for the broader economy, it's that the job losses were almost entirely concentrated among summer students (though try telling your teenager that's good news).

Katherine Giroux-Bougard, national chairperson of the Canadian Federation of Students, said the record student unemployment rate will exact a terrible toll at a time when tuition fees are rising.

Students who have been unable to find work this summer will be forced to take on more debt and may be unable to afford to return to school this fall, Ms. Giroux-Bougard said in a statement.

Summer jobs are not a luxury; they pay the bills.

Mr. Vimal said he is fortunate enough to live with his parents, but his family is of modest means. My mum works in a factory, my dad works in a factory. We're on a tight budget.

Everyone pitches in to pay the household bills and one of Mr. Vimal's uncles, who owns a restaurant, gives him occasional work as a dishwasher. Mr. Vimal is paying his own way through school but, this year, has been unable to save anything.

From May to August, Statscan collects labour market information about young people, aged 15 to 24, who were attending school full-time in March and intend to return to school in the fall. The published estimates are not seasonally adjusted. Therefore, comparisons can only be made on a year-over-year basis, the agency said.

Ms. Giroux-Bougard said tuition fees are the single largest expense for most university and college students, with average domestic tuition fees of almost $5,000 a year. Students in six provinces will face tuition fee increases of between 2 and 8 per cent this year, she said.

Andrew Pyle, a wealth adviser for Scotia Capital Inc., noted that students who do not get student loans will have to rely more heavily on Bank Mum and Dad, and this will have implications for overall consumer spending.

We need to care about youth unemployment because if there isn't sufficient money to go back to school, it will come from other places (hint, hint no new car for the parents), Mr. Pyle said in a note to clients.

Noah Stewart, a communications student at Montreal's Concordia University and national deputy chairperson of the Canadian Federation of Students, said it has been a time of high anxiety for members of his organization.

A lot of people are coming to us and saying they may not have been able to find work this summer and they are facing tuition increases of hundreds of dollars in the fall. They don't know what to do, Mr. Stewart said in an interview.

Come September, a number of students who normally would have socked away a couple of thousand dollars will return to school with nothing in the bank if they can afford to return to school at all.

We're going to see the level of debt skyrocket, Mr. Stewart said.

We're already talking about an average [debt] of $30,000 across the country for undergraduates, he said, adding that students now face the prospect of graduating into an uncertain job market with even larger debt loads.

Employers report a greater-than-normal number of applicants for seasonal jobs this year.

The job fairs were very busy [with] about twice as many applicants as previous years, and the average age of applicants went up, said Shawnda Walker, a spokeswoman for Beasley Amusements, the private company that runs the popular Centreville amusement park on Toronto's Centre Island.

Beasley Amusements hires roughly 400 people a year to work at Centreville. The pay is minimal, but it is a popular summer gig, Ms. Walker said.

Most of our employees are students trying to make money to help pay for school.

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See also:

Job losses deeper than feared
Jobless rates by province
Strike has students fretting about lost income