Student and Youth (Un)Employment

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A quick comment on Andrew Jackson’s post on Behind the Numbers (one of CCPA’s blogs).

The Canadian Federation of Students have similar numbers to Jackson in their student unemployment fact sheet (PDF).

Most economists I talk to are generally at a loss over how the government thinks it can increase student and youth employment without direct state intervention in the economy through wage subsidies and/or direct student employment programs.

Even according to the OECD, if youth employment is just left to the market, any increases in the minimum wage results in an increase in unemployment of youth and students. They suggest that without government support for youth/student/apprenticeship programs, youth unemployment will continue to be high and lead to a large range of long-term social ills. Hardly a socialist position, but it does indicate that under the current economic system state intervention is necessary to ensure students and youth are not just pushed out of the labour market. However, this is just shifting employment around since students end up taking the low paid jobs instead of someone else. Really, the only way to bring this kind of unemployment down is to provide wage subsidies or direct student-focused public job creation.

The Canadian Federation of Students has long supported the Federal Student Work Experience Program and similar programs that subsidize wages for students who work in the summer. The problem is that this program has not seen the increases necessary to keep up with enrolment, never mind the increase in need by students and demand by small businesses and non-profits. The Federation has indicated this numerous times even when the government reversed a decision to make cuts to the programs.

That being said, students say that the way to address high youth and student unemployment is to address the main average level of unemployment. The traditional student and youth job markets (i.e., entry-level positions and temporary employment) are eaten up by the reserve army of the skilled out-of-work workers - especially in this recession. Also, we have seen, with public sector hiring freezes and reductions (both provincial and national) of the previous twenty years have contributed high level of unemployment for youth and student.

I think that most economists agree that the only way to address youth unemployment (either through wage subsidies or through direct hiring) is through state intervention. The question is whether the current government is going to start listening to them.

One final point: Student unemployment and high tuition fees are definitely driving up student debt. This is one of the reasons that the government has reached its $15 billion debt ceiling on student debt 5 or so years before it expected to. It is also contributing to what we think is a large clime in education-related private debt loads. That is to say, that private debt to income ratio is only going to get worse.

It is a bleak picture for students and youth in this country and, as the privatization/marketization of education continues unabated, it will only get worse.