Publisher's Desk|Canadian HR Law|HR Policies & Practices|Employment Law|The C-Suite|HR Guest Blog

Youth unemployment a global crisis

Employers, retirees could be long-term losers if young people are unable to find work soon

By Todd Humber

Musical chairs is a fun game to play when you’re in elementary school. But for new grads looking for a job, the race to find an empty chair isn’t as alluring.

There is a crisis in youth not being able to find work — the global unemployment rate for people age 15-24 was 12.6 per cent last year and is projected to rise to 12.7 per cent this year, according to Global Employment Trends for Youth 2012, a 55-page report produced by the International Labour Office in Geneva.

To put those numbers in perspective, the global youth unemployment rate was 11 per cent in 1992. It peaked at a high of 13.1 per cent in 2001, but steadily decreased to 11.6 per cent in 2007. When the economy tanked in 2008, however, the rate quickly shot up and it hasn’t come down. And there’s little hope on the horizon — the report expects it to remain high through 2016, with no guarantees it will improve.

The numbers in Canada aren’t pretty, either. According to Statistics Canada, the unemployment rate for young workers was 13.9 per cent in April, nearly double the national rate of 7.2 per cent.

Dig a little deeper, and the numbers are even worse than they look. Many young people unable to find work have opted to stay in school longer and pursue higher education. That’s laudable, but they can only stay in school so long — when they eventually graduate with a second degree or a graduate degree and enter the workforce, they’ll just add to the throngs of youth looking for work.

Many young workers lucky enough to have a job aren’t exactly thriving, either.

“Around the world, many youth are trapped in low productivity, temporary or other types of work that fall short of their aspirations and that often do not open other opportunities to move to more permanent, higher productivity and better-paid positions,” the report states.

Many of these workers are taking temporary and part-time jobs, often outside their field, because it’s the only option available. They’re not unemployed on paper, but they’re also not on solid ground to have thriving careers.

This is a serious societal problem. The report points out the long-term consequences of the youth jobs crisis, including increased vulnerability to future economic shocks; depressed wages over the lifetime of these young workers; and social instability.

This is a serious problem for employers. If an organization is lucky, its short-term succession planning pipeline is crammed full of talent. But what about a slightly longer view? Where is the next generation of leaders and high performers going to come from if many youth are spending year after year unemployed or underemployed, not gaining the experience they need?

And this isn’t just a talent problem. It’s also a recipe for an economic disaster. Just think of its impact on stock markets and, in turn, employer pension plans and employee retirement savings.

Our population is aging. According to just-released data from the 2011 Census, seniors accounted for 14.8 per cent of Canada’s population in 2011, up from 13.7 per cent in 2006. There are 9.6 million baby boomers — nearly three out of 10 Canadians — and their mass exodus from the workforce has begun.

As retirees pull money out of the markets to use in their golden years, what will happen to the portfolio of workers with defined contribution pension plans? What will happen to the value of assets used to drive growth in defined benefit plans?

If young workers aren’t fully employed and earning decent wages, they won’t be able to pump money into the markets. It doesn’t take an economist to spot the problem in that equation.

So what’s the solution? What can we do to ease youth unemployment?

While there are no easy solutions, there are strategies worth pursuing. We know there are industries that are experiencing, and will be experiencing, shortages. On the cover of the June 4 issue of Canadian HR Reporter, for example, we highlight the fact the construction sector will be facing a shortage of 319,000 workers by 2020.

We need to address the skills mismatch. Many other sectors are expecting similar labour crunches, both in the short run and in the long term picture. Both the public and private sector (not to mention parents) need to work together to steer students into in-demand careers.

Some employers experiencing skills shortages are already working with secondary and post-secondary institutions to develop curriculum that matches the skill set they need in employees.

We need to find a way to make these in-demand trades more appealing to students. We need to get more students excited about careers in technology.

But perhaps most importantly, we need to find some way to get the 13.9 per cent of Canadian youth who can’t find work a seat in the interim in this high stakes game of musical chairs. Otherwise, we risk having a lost generation.

Todd Humber is the managing editor of Canadian HR Reporter, the national journal of human resource management. He can be reached at

© Copyright Canadian HR Reporter, Thomson Reuters Canada Limited. All rights reserved.

Todd Humber

Todd Humber is the publisher and editor-in-chief of Canadian HR Reporter, the national journal of human resource management. Follow him on Twitter @ToddHumber
(Required, will not be published)
All comments are moderated and usually appear within 24 hours of posting. Email address will not be published.
1 Comment