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SOURCE CIBC World Markets
Teens being displaced driving jobless rate to record levels
TORONTO, Sept. 5, 2013 /CNW/ - The jobless rate among students 15-18 years old looking for part-time work has climbed past 20 per cent - the highest on record - as older Canadians are increasingly being forced to take on part-time jobs, finds a new report from CIBC World Markets Inc.
The report notes that there has been a stunning 22 per cent drop in employment in the 15-18 age group since 2007, far outstripping the four per cent drop in their population over that period.
"While Canada's unemployment rate is well off its recession highs, the quality of new jobs has left much to be desired," says Avery Shenfeld, Chief Economist at CIBC. "Manufacturing has been steadily shrinking its share of the workforce, and of late, governments are also paring back. CIBC's job quality index has captured that trend decline. The lack of higher paying work has forced parents into taking the kind of employment previously reserved for teenage students."
Mr. Shenfeld notes that the most significant employers of young Canadians has traditionally been in the retail and food service sectors. However, recently food counter and kitchen help employment has plunged among those under 19, but soared for other age groups, including a huge climb for those 25 and over. It's been much the same for lower level retail sales and cashier positions.
"Young adults, displaced older workers, or immigrants whose education and skills are not always fully rewarded in the job market have been pushed into low-wage work during what has been a fairly lacklustre economic recovery," adds Mr. Shenfeld. "The real story is that the job market has not been strong enough to generate higher quality employment for older workers."
With average weekly wages up by only 1.7 per cent in the last 12 months he notes there has been no material lift to spending power in Canada. The country needs a better job mix, along with productivity growth in existing jobs before we'll see a significant increase in wages, which will free up part-time work for students.
"For that, we need faster global growth to propel the export-oriented industries that typically generate higher quality positions," says Mr. Shenfeld. "Struggling emerging market countries are part of why that isn't yet happening but we're keeping a closer eye on the U.S. budget debate, which far more than Fed tapering, will set Canada's fate in 2014."
Mr. Shenfeld believes a lack of part-time employment for students can have far-reaching consequences for the economy. "Some might dismiss the absence of student jobs as no big deal. True, there's less foregone income than in the loss of full-time adult positions.
"But student jobs are not just about being able to splurge for designer jeans. For lower income, single parent households, those extra dollars can be material, and are a source of savings for higher education."
The complete CIBC World Markets report is available at: http://research.cibcwm.com/economic_public/download/eisep13.pdf.
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