82-4E
YOUTH UNEMPLOYMENT
IN CANADA
Prepared by:
Kevin B. Kerr
Economics Division
Revised 11 February 2000
TABLE
OF CONTENTS
ISSUE
DEFINITION
BACKGROUND
AND ANALYSIS
A. Cyclical
Factors
B. Non-Cyclical
Factors
C. Policy
Induced Unemployment
1. Unemployment
Insurance
2. Minimum
Wages
D. Recent
Developments in the Youth Labour Market
PARLIAMENTARY
ACTION
CHRONOLOGY
SELECTED
REFERENCES
TABLE
1
TABLE
2
YOUTH UNEMPLOYMENT
IN CANADA*
ISSUE
DEFINITION
For
many young individuals (those aged 15-24), the transition from school
to work means entering the labour market relatively unskilled, inexperienced,
unfamiliar with job search and unaware of the job opportunities open to
them. Consequently, many of them face the possibility of unemployment
during their initial years as members of the labour force. This negative
correlation between age and unemployment is well documented in many countries
and, as evidenced by the level of youth unemployment in this country,
Canada is no exception. While this relationship persists, its strength,
proxied by the youth/adult unemployment rate ratio, has diminished over
the past 20 years. It should be noted, however, that youth unemployment
relative to that of adults has worsened since the 1990-91 recession. Trends
in youth unemployment rates by age, sex and region may be found on pages
16 and 17 of this review.
Despite the
relatively high level of public attention given to the issue of unemployment,
this attention seldom addresses the various types of unemployment and
their underlying causes. This paper attempts to do this with respect to
present-day youth unemployment.
BACKGROUND
AND ANALYSIS
The
labour market is most easily perceived as one big market housing both
demanders (employers) and suppliers (workers) of labour. It should be
borne in mind, however, that suppliers in this market are non-homogeneous,
the most distinguishing feature of importance here being that of age.
Demanders and suppliers are constantly searching for each other: the former
seek to purchase the productive services of labour while the latter seek
to sell them. The impetus behind this process is the wage rate or the
price of productive services. However, for a number of reasons this process
is not instantaneous and requires varying amounts of time to pass before
being realized. Consequently, some suppliers encounter periods of unemployment.
These periods of unemployment vary in frequency and duration depending
on workers skills, the nature of jobs, the level of economic activity
and the structure and operation of the labour market itself.
The
supply of labour or the size of the labour force consists of those who
are employed as well as unemployed. Unemployment as defined by Statistics
Canada is experienced by those (15 years of age and older) who during
the reference week of the survey: were unemployed and actively seeking
work; had not actively searched for work in the past four weeks and were
expecting to be recalled from a layoff or, had not actively searched for
work but expected to start a new job within four weeks.
Throughout
the 1970s, demographic factors were relied on as a major reason for the
upward trend in youth unemployment. During this period, the active youth
population (all individuals aged 15-24) grew substantially. As well, and
this applies especially to young females, youth participation rates (a
ratio of the youth labour force to the active youth population) also increased
significantly during this period. The combined effect of these resulted
in an unprecedented influx of young people into the labour force. Today,
the size of the youth labour force is declining; the number of young individuals
in the Canadian labour market has declined every year since 1982. Nevertheless,
unemployment among those 15-24 years of age remains high, indicating that
non-demographic factors also play a major role in this problem. The following
discussion examines a number of factors that explain why young workers
experience higher rates of unemployment than their adult counterparts.
A. Cyclical Factors
Probably
the most familiar cause of unemployment is a depressed level of economic
activity. Deficient demand or cyclical unemployment is a consequence of
insufficient aggregate demand for goods and services and is in no way
related to how well a labour force is trained or deployed. Since labour
is required to produce goods and services, demand for it falls during
a downturn in the level of economic activity. Generally associated with
adverse business conditions, attempts to reduce the level of demand-deficient
unemployment have generally required the use of traditional macroeconomic
instruments, namely fiscal and monetary policies. By increasing government
spending and/or money supply, governments can stimulate consumption and/or
investment in order to raise the level of aggregate demand and consequently
the demand for labour. However, the use of these policy instruments as
vehicles to raise the level of employment may conflict with another and
also very important policy objective; namely, a low and stable rate of
inflation. This policy conflict stems from two underlying relationships:
the rate of wage change is inversely related to the level of unemployment
(the level of excess demand for labour) and the rate of change in prices
is directly related to the rate of change in wages. Although this rather
short explanation fails to incorporate the issue of inflationary expectations,
it does provide the essence of the theoretical groundwork behind this
policy conflict and what is often referred to as the natural rate of unemployment.
Demand-deficient
unemployment is usually viewed as an economy-wide problem and, if untargeted,
attempts to generate jobs for the young stand little chance of success.
In a situation of deficient demand adult workers are also laid off. Since
adult workers are generally more marketable and attractive to employers
at the going wage, they will be the first to be rehired as soon as the
economy begins to experience the effects of the government stimulus. This
notion has found some support in the United States where empirical evidence
shows a relatively small reduction in youth unemployment during periods
of government stimulus.
Another
type of unemployment linked to a situation of slack demand for labour
is called seasonal unemployment. Its cause is related to seasonal factors
rather than to a general malaise in the level of economic activity. The
effects of seasonal factors on aggregate demand for labour are relatively
small but tend to gain importance if examined in a regional context. The
industrial and occupational mix in some regions of Canada is more evenly
distributed than in others. Obviously, unemployment caused by seasonal
factors will be much more pronounced in those regions that depend mostly
on seasonal industries.
Seasonal
unemployment is also caused by seasonal effects on the supply of labour
and it is here that the young are most concerned. At the end of each school
year a large number of students enter the labour force intent on securing
summer employment. Although many are successful in guaranteeing themselves
a job before the school year ends, many are not and end up being included
in the ranks of the unemployed while they search for a summer job. These
jobless students often require more than a month of search before becoming
employed. This is evidenced by the fact that the absolute number of unemployed
youth peaks during the months of June and July. Over the years, the relative
size of the returning student labour force has risen and many students
seeking summer employment experience a period of unemployment. Although
this is not thought to be overly significant, their numbers have tended
to put upward pressure on the average annual number of unemployed youths.
Governments offer a number of summer job creation programs for youth and
their continued use helps to alleviate this seasonal component of unemployment
among the young. At the federal level, the government allocates funds
each year to help students secure summer jobs. It has committed $240 million
to the summer student job program in 1997 and 1998.
B. Non-Cyclical
Factors
As
already mentioned, labour market participants function in a very dynamic
environment and require time before fully realizing their intentions.
Hence it is not surprising that job vacancies and unemployed individuals
co-exist. One reason for this is simply that fully qualified unemployed
individuals have yet to find job openings. Individuals in this position
are said to be frictionally unemployed. Job seekers gather information
on available jobs, while employers select workers from among an array
of job seekers. This search process is not costless (its cost being measured
by lost production) and of course requires time. In the early 1970s, frictional
or search unemployment was thought to account for a significant proportion
of total unemployment in this country; at that time, it was estimated
that frictional unemployment accounted for nearly one-third of Canadas
unemployment and its level was positively related to the degree of excess
demand in regional labour markets (i.e., higher in the province of Alberta
than it would be, say, in Newfoundland). Today, its impact on the unemployment
rate is thought to be less pronounced as the relative influence of structural
factors on unemployment in Canada increased over the last decade.
Frictional
unemployment is thought to be high among the young for a number of reasons.
Initially most young individuals are inept at job search and require time
to "learn" before search yields success. The young are also
generally characterized as having a lower attachment to the labour force.
They appear to have more alternatives to work than many adult workers
and consequently withdraw from and re-enter the labour force more often.
For example, a young person does not usually have the same financial responsibilities
as most adult workers and consequently may elect to work for a while and
then withdraw from the labour force, perhaps to travel or return to school.
Whatever the reason, when young people return to the labour force most
must actively search for work.
It
is suggested that frictional unemployment is high among the young because
they have the most to gain. That is to say, their returns to search extend
over a longer period, and attempts to market their initial years of skill
acquisition and job experience will have the most pronounced effect on
their lifetime earnings. When a young person first enters the labour market,
he/she often has few marketable skills and other saleable characteristics
(for example job experience) to offer prospective employers. As these
individuals acquire marketable skills they begin to search for higher
paying jobs. In many instances, these bouts of job "hopping"
or "shopping" result in temporary periods of frictional unemployment.
Another
reason for the co-existence of job vacancies and unemployment is that
unemployed individuals are not qualified to fill these vacancies, or are
qualified, but unable to accept employment because they are geographically
separated from the job. Individuals in this group are said to be structurally
unemployed. The time distinction between frictional and structural unemployment
is somewhat arbitrary; the latter generally referring to long-term unemployment.
Structural unemployment is a very serious problem because it appears to
be worsening and requires much more time to remedy.
Industrial
location, production techniques and consumption patterns change over time.
As a result, labour as well as other factors of production must also change.
If the qualitative characteristics inherent in the supply of labour or
its location are too slow in making this adjustment, the result is structural
unemployment. In the past, the supply of skilled (primarily blue-collar
skills) labour has largely been accommodated through immigration. Canadas
lengthy reliance on a policy that encouraged a "buy" rather
than "make" approach to skilled workers; our emphasis on formal
training; the present-day cost of non-firm specific training, particularly
in unionized firms; and a myriad of other reasons have all contributed
to the present-day structural unemployment problem in this country.
As
mentioned earlier, a structurally unemployed individual is also one who
is qualified but unemployed as a result of being geographically separated
from available jobs. The distribution of economic growth across Canada
is far from uniform, so some individuals are required to move if they
are to secure employment in their respective occupations. Mobility is
not a costless exercise and in many cases, although substantial monetary
returns may be realized, it does involve a high degree of risk or uncertainty.
As well, Canada is a large country and moves often mean separations from
family and/or friends. Nonetheless, an efficiently operating labour market
requires labour, especially if highly qualified and unemployed, to move
to high demand locations.
Structural
unemployment of the immobile worker type is probably not as pronounced
among young workers as among adults. Those unemployed youth who do possess
skills needed elsewhere are generally viewed as being more flexible and
adaptable than adult workers and consequently in a better position to
move. As well, while mobility provides financial rewards for most, the
period of return for members of this group is longest and therefore they
have more to gain by moving. However, this is not intended to suggest
that structural unemployment of this type eludes the young. A frequently
cited reason for the effect of this type of structural unemployment on
youth involves the issue of unemployment insurance (U.I.), a subject which
is discussed further below.
Despite
the steady improvement in the relative labour market position of young
workers since the beginning of the last decade, many Canadians believe
that todays youth face a more uncertain future in their quest to
secure meaningful jobs and economic security. While evidence suggests
that some young workers face a difficult future, this prognosis does not
appear to be valid for young workers generally. The gap between the unemployment
rate for youths with a university degree and the unemployment rate for
all individuals with a university degree was 4.6 percentage points in
1998. Using the same relative comparison, the labour market position of
youth who did not complete high school produced a gap of 8 percentage
points. It appears that the productive characteristics of young, less
educated workers do not match the requirements of the labour market. And
the trend toward rising skill requirements will undoubtedly prove increasingly
problematic for early school leavers in the future. Human Resources Development
Canada estimates that between 1995 to 2000, approximately one-fifth of
the new jobs created during this period are expected to require management
skills, 20% are expected to require a university degree, 20% will require
a community college degree or trade certification, and almost one-third
are expected to require high school completion. In other words, those
who have not completed high school will continue to face limited employment
opportunities. In 1998, early school leavers accounted for 43% of the
total number of unemployed youth; this group registered an unemployment
rate of 22.7%, 1.5 times the annual average rate for all youth.
C. Policy Induced Unemployment
1. Unemployment
Insurance
Not
long after the U.I. revisions of 1971, it was said that the program was
impeding "normal" behaviour in the labour market. On the demand
side, the program allows employers to keep their labour forces attached
during a temporary downturn and thereby forgo the costs of recruiting
and training workers once production returns to its normal level. Knowing
that workers incomes are partially protected, encourages employers
to resort to layoffs more frequently than would otherwise be the case.
More
important, however, is the programs effect on the supply side. For
unemployed workers the program is intended to provide income assistance
in order to facilitate longer and more effective periods of search. However,
because of the level of assistance, entrance requirements and the programs
benefit structure, some argue that this has led to an increase in both
frictional unemployment and structural unemployment of the immobile worker
type. It is argued that frictional unemployment has risen because U.I.
benefits induce some individuals to consume paid unemployment more frequently
and for longer periods. As well, it is thought that the program has attracted
some individuals into the labour force merely in order to become eligible
for benefits. Many argue that structural unemployment has risen because
unemployment insurance reduces the financial incentive for some individuals
to move to high demand areas in need of their skills. Consequently, the
duration of their unemployment is extended. This is considered to be most
pronounced among unemployed individuals living in areas where benefits
have been extended due to a higher unemployment rate in their local labour
market.
While
the U.I. program has undoubtedly proven beneficial for many individuals
across this country, most studies of its effect on the labour force conclude
that the 1971 revisions led to an increase in aggregate unemployment.
One study that examined this issue with respect to youth suggests that
the U.I. revisions of 1971 have also had some effect on the level of youth
unemployment, and this is most pronounced among females aged 20-24.
In
July 1996, the Unemployment Insurance Act was replaced by the Employment
Insurance Act (EI). Under the new insurance system, benefit eligibility
and duration are based on hours, rather than weeks, of insured employment.
For many, this change effectively raised the entrance requirement. This
was particularly true for new entrants and re-entrants as their entrance
requirement was raised from 20 weeks of insurable employment (at a minimum
of 15 hours per week) to 900 hours. Maximum weekly benefits were reduced
and weekly benefits are now averaged over a fixed period called the rate
calculation period, whose duration depends on the regional rate of unemployment.
The benefit rate under EI is 55% of average insurable earnings; however,
this can decline to as low as 50%, depending on a claimants claim
history. In terms of program financing, the EI Account may now maintain
a surplus so as to minimize fluctuations in premium rates over the business
cycle.
In
conjunction with the major provisions outlined above, the reconfiguration
of the insurance system provides guidelines for the delivery of employment
benefits (previously referred to as unemployment insurance developmental
uses). Financial assistance under employment benefits includes grants,
contributions, loans and vouchers. Those eligible for these benefits include,
in addition to those currently eligible for regular benefits, those who
received regular benefits in the past three years and those who received
maternity or parental benefits in the past five years. In May 1996, the
Minister of Human Resources Development extended an offer to all provincial
and territorial governments to assume responsibility for employment benefits.
Needless
to say, since 1971, unemployment (employment) insurance has undergone
a number of modifications, many of which were designed to reduce the programs
disincentive effects. According to a recent Department of Finance working
paper, the disincentives associated with the current program are similar
to, or less extensive than, those that existed prior to the 1971 reform.
2. Minimum Wages
Another
policy measure that is particularly relevant to the issue of youth unemployment
is minimum wage legislation. Most of the legislation affecting the covered
sector (those employees covered by minimum wage legislation) is provincially
controlled; however, the federal government does control minimum wage
legislation covering workers under the Canadian Labour Code.
Minimum
wages can theoretically lead to an increase in employment if firms in
the covered sector are non-competitive in the labour market. This refers
to a case where a firm can control the price it pays for labour because
it is the only buyer (monopsony). In practice however, the monopsonist
argument favouring minimum wage legislation would not appear to be extensively
supported. Hence, a minimum wage which exceeds the competitively determined
rate will tend to reduce the level of employment in the covered sector
(labour displacing effect).
Low
wage workers in the covered sector are generally characterized as being
unskilled, untrained and in many cases less attached to the labour force.
Consequently, less experienced youth with similar characteristics must
compete with more experienced adult workers for employment. It should
be noted, however, that some provinces have established sub-minimum wage
rates (i.e., minimum wage rate for certain categories of workers, such
as young workers). The intent of such rates for youth is to reduce the
level of competition with adults. In most cases, however, this differential
applies to employees under 17-18 years of age; thus, no competitive differential
exists for a majority of young workers.
Evidence
of the effects of minimum wages on aggregate unemployment is somewhat
mixed, although most studies unambiguously support a labour displacing
effect. One study that attempted to measure the effect of minimum wages
on teenage unemployment concluded that over the 1956-75 period, minimum
wages increased unemployment among males and females by 0.8 and 1.6 percentage
points respectively. Over the years, minimum wages have undoubtedly increased
the incomes of some workers, but they have also constrained the level
of employment in the covered sector. Although minimum wage rates in most
jurisdictions declined by comparison with the average industrial wage
throughout the 1980s, some jurisdictions (e.g., B.C. and N.W.T.) have
substantially increased the minimum wage rate since the early 1990s. This
is particularly true in the case of the federal minimum wage, which became
aligned with the general minimum wage rate in each province and territory
as of 1 July 1996. As a result of this change, the federal minimum
wage rate increased from $4.00 per hour to a low of $4.75 in Newfoundland
and a high of $7.00 in British Columbia. As this measure does not accommodate
sub-minimum wage rates for youth, the impact of this change is expected
to be greatest among young workers.
D. Recent Developments
in the Youth Labour Market
As
illustrated in Chart 1, the youth labour market witnessed a marked improvement
over the latter half of 1999. Between the 2nd and 4th
quarters of 1999, the number of employed youths increased by 2.1% (45,000).
The proportion of those 15 to 24 years of age who were employed - the
employment rate - increased during this period by almost one percentage
point to reach a seasonally adjusted level of 55.3% by the final quarter
of the year.
The
number of unemployed youths also fell during the latter half of 1999,
with the biggest decline occurring in the 3rd quarter, as illustrated
in Chart 1. Between the 2nd and 4th quarters of
1999, the number of unemployed youths dropped by 29,000 (7.7%). The combination
of strong job growth and lower unemployment served to reduce this age
groups seasonally adjusted unemployment rate from 14.5% in the 2nd
quarter of 1999 to 13.3% in the final quarter of the year. This is the
lowest quarterly rate since the 3rd quarter of 1990.
As
can be seen from Chart 2, youth labour market conditions improved in all
regions of the country in the latter half of 1999. The seasonally-adjusted
youth unemployment rate in Atlantic Canada declined by almost 1.3 percentage
points between the 2nd and 4th quarters of last
year, falling from 19.4% to 18.1%. The jobless rate among youths in Central
Canada experienced the largest decline during this period, dropping from
14.8% to 13.1%. The decline in Western Canadas youth unemployment
rate was negligible compared to that elsewhere in the country, falling
from 12.8% in the 2nd quarter to 12.7% in the 4th
quarter of 1999. For the second consecutive year, Manitoba registered
the lowest annual youth unemployment rate (10.1%) in 1999.
PARLIAMENTARY
ACTION
Full
utilization of Canadas manpower resources has been a long-standing
policy objective of the government. However, a specific policy geared
toward youth in the labour market has never been explicitly stated.
Unless
associated with the Standing Committee on Human Resources Development,
most Members of Parliament seldom find themselves dealing with subject
matter specifically related to youth in the labour market. On 11 December
1984, a unique opportunity was provided to 12 Senators when a Special
Committee was established to study the issues and problems facing young
Canadians. In its final Report, the Special Committee made a number of
recommendations, including the need for measures to reduce illiteracy
among youth, increase co-operative education and apprenticeship training
and establish a Young Canadians Community Service Program. Most
recently, Bill C-12 (An Act respecting employment insurance in Canada)
was examined by Parliament and received Royal Assent on 20 June 1996.
Among other changes, the entrance requirement for new labour force entrants,
many of whom are young workers, was significantly increased. This, and
a host of other cost-saving measures, will increase the amount of funds
available for training and job creation, collectively called employment
benefits.
CHRONOLOGY
19
February 1986 - Report of the Special Senate Committee on Youth - Youth:
A Plan of Action - was tabled in the Senate.
3
December 1986 - The Minister of Employment and Immigration tabled the
Report of the Commission of Inquiry on Unemployment Insurance (Forget
Commission). In addition to recommendations on unemployment insurance
reform, the Report contained a number of recommendations which focused
on human resource development. Two of these were directed specifically
at youth. The need to cooperate with provincial governments to ensure
that all youth could achieve a high minimum level of education was mentioned.
It was also suggested that the Minister of State for Youth should consider
implementing a comprehensive Youth Opportunities Program.
1
December 1987 - Youth would undoubtedly benefit from some of the recommendations
in the recent report of the Senate Sub-committee on Training and Employment
(In Training, Only Work Works), particularly in terms of the need
to address the problem of illiteracy and develop more comprehensive education
and training programs involving links between school and industry.
12
January 1988 - The Minister of State for Youth announced that the government
would allocate $180 million to the Challenge 88 program. Roughly
70% ($127 million) of this would be spent on the Summer Employment/Experience
Development component of the program.
27
January 1989 - The Minister of State for Youth announced that the government
intended to spend $198.9 million on Challenge 89. The largest component
of this program - Summer Employment/Experience Development - would receive
$119 million.
11
April 1989 - The Minister of Employment and Immigration announced the
details of the governments Labour Force Development Strategy. Although
the bulk of this strategy focused on reforming the Unemployment Insurance
Program, there was a measure to increase expenditures on entry-level skills
development by $100 million in the coming fiscal year. Most of this would
be earmarked for apprenticeship training and co-operative education.
9
February 1990 - The Minister of Employment and Immigration announced funding
for Challenge 90 ($125.9 million) and a $296-million five-year
program called the National Stay-in-School Initiative. Some $47 million
was to be expended on this initiative in 1990-91.
23
October 1990 - Bill C-21 received Royal Assent thus paving the way for
the government to implement its Labour Force Development Strategy. Part
of this strategy called for additional spending ($100 million) on entry-level
training.
4
February 1991 - The Minister of State for Youth, Fitness and Amateur Sport
announced $143 million would be allocated to the 1991 Challenge Program.
The Summer Employment/Experience Development Program would receive $80 million,
Work Orientation Workshops would receive $35.2 million, Student Business
Loans $942,000, Business Drive for Jobs $805,000, and Native Internship
$2.3 million; $9.7 million would be allocated to Canada Employment
Centres for Students, and the remainder to program delivery costs.
29
October 1991 - The Ministers of Industry, Science and Technology and of
Employment and Immigration announced the Prosperity Initiative, a comprehensive
consultation process designed to establish initiatives to enhance Canadas
international competitiveness. One of the major aspects of this initiative
involved human resource development. As education and training determine,
in part, the productive capacity and earning potential of the labour force,
these consultations were important for Canadas youth, especially
those who failed to obtain a basic education.
18
March 1992 - The Minister of State for Youth, Fitness and Amateur Sport
announced that $96.7 million would be allocated to the 1992 Challenge
Program. While this was considerably less than the previous years
allocation, it should be noted that WOW (Work Orientation Workshops) was
no longer an option under the Challenge Program. As of 1992-93, these
expenditures would be incorporated with the START option under the Stay-in-School
initiative. Approximately $53.7 million would be available under START
in 1992-93.
29
October 1992 - The Steering Group on Prosperity released its report Inventing
Our Future: An Action Plan for Canadas Prosperity. The report
outlined a number of ways for ensuring that young people were better prepared
to enter the world of work.
24
February 1993 - The Minister of State for Youth, Fitness and Amateur Sport
announced that $101.9 million would be allocated to the 1993 Challenge
Program. The breakdown was as follows: Summer Employment/Experience Development,
$88 million; Student Business Loans, $1.14 million; Business
Drive for Jobs, $0.8 million; Canada Employment Centres for Students,
$9.6 million; and Native Internship, $2.4 million.
18
January 1994 - In the Speech from the Throne, the government announced
its intention to create a Youth Service Corps to put young people back
to work as well as develop, in partnership with the provinces and the
private sector, initiatives to better prepare youth for the transition
from school to work.
15
April 1994 - The government announced the basis of a youth employment
and learning strategy. This strategy comprises six initiatives: Youth
Service Canada, Youth Internship, Summer Employment Program, a reformed
Canada Student Loans Program, Learning Initiatives and Stay-in-School.
The strategy is budgeted at $684.5 million in 1994-95; almost 70%
is earmarked for student loans.
23
June 1994 - The Canada Student Financial Assistance Act received
Royal Assent thus paving the way for an increase in loan limits as well
as other reforms. In the beginning of August, full-time weekly loan limits
increased from $105 to $165 and the ceiling on loans to part-time students
increased from $2,500 to $4,000.
17
March 1995 - The Secretary of State (Training and Youth) announced that
$90.1 million would be spent on the Student Summer Job Action Program
in 1995, to create 44,500 summer jobs for secondary and post-secondary
students.
6
March 1996 - As part of the budget, the Minister of Finance announced
that the government intends to spend an additional $165 million over
a three-year period to encourage education and skills development among
youth. In addition, $350 million will be reallocated over the same
period to promote employment opportunities among youth. Some of these
funds will be used to double spending on summer job placements in 1996-97.
20
June 1996 - Bill C-12 (An Act respecting employment insurance in Canada)
received Royal Assent and thereby replaced the Unemployment Insurance
Act.
1
July 1996 - The Minimum Hourly Wage Order, 1996 came into effect. As a
result of this change, the federal minimum wage is now aligned with the
general minimum wage rate in each province and territory. As of 1 July
1996, the federal minimum hourly wage increased from $4.00 to a low of
$4.75 in Newfoundland and a high of $7.00 in British Columbia.
8
September 1997 - The government committed $90 million (over three years)
to provide one-year internships in the federal public service for unemployed
youths aged 15 to 30.
23
September 1997 - In the Speech from the Throne, the government promised
to work in several ways to assist youths in making a smoother transition
from school to work. These ways include providing financial support for
post-secondary studies; extending and broadening internship programs;
developing a nation-wide mentorship program; and expanding community-based
employment programs for disadvantaged youths.
19
February 1998 - The government announced that it intends to spend $120
million on Student Summer Job Action this year. This funding is expected
to provide jobs to some 60,000 students.
24
February 1998 - The Minister of Finance tabled a budget containing several
youth-related measures. These included the creation of a scholarships
fund; a 17% tax credit on federal/provincial student loan interest payments;
improvements to the Canada Student Loans Program, such as interest relief;
the introduction of an education savings grant; an EI premium holiday
for employers who hire youths in 1999 and 2000; and increased funding
to create job opportunities for youths who lack basic education and job
skills, the most disadvantaged of all unemployed youths. The federal government
intends to double resources devoted to members of this group, especially
those 20-24 years of age who have not completed high school.
7
December 1998 The government announced that, commencing in the
fiscal year 1999-00, permanent funding of $155 million per year would
be allocated to the Youth Employment Strategy. This allocation is almost
50% higher than yearly expenditures devoted to this initiative during
the first three years of operation. Funding for the strategy had been
set to end on 31 March 1999.
8
February 1999 The government announced that it intends to devote
$120 million to Student Summer Job Action in 1999. It is hoped that
these funds will help create summer jobs for more than 60,000 students.
Last summer, this threshold was exceeded by 10,000 students.
27
January 2000 The Minister of Human Resources Development announced
that the federal government expects to spend $120 million on the
Student Summer Job Action program in 2000. This amount is unchanged from
last years allocation and is projected to provide over 60,000 summer
jobs for students across the country.
SELECTED
REFERENCES
Betcherman,
G. and R. Morissette. Recent Youth Labour Market Experiences in Canada.
Research Paper Series No. 63, Statistics Canada, July 1994.
Canada,
Ministerial Task Force on Youth. Take on the Future: Canadian Youth
in the World of Work. 1996.
Crompton,
S. "Employment Prospects for High School Graduates." Perspectives,
Statistics Canada, Autumn 1995.
Denton,
F.T., A.L. Robb and B.G. Spencer. Unemployment and the Labour Force
Behaviour of Young People: Evidence from Canada and Ontario. Ontario
Economic Council, University of Toronto Press, 1980.
Statistics
Canada, "Youths and the Labour Market." Labour Force Update.
Spring 1997.
Sunter,
D. "Youths - Waiting it Out." Perspectives, Statistics
Canada, Spring 1994.
Table
1
UNADJUSTED YOUTH UNEMPLOYMENT
RATES BY AGE
GROUP AND SEX, CANADA (%)
|
15-19 Years
|
20-24 Years
|
15-24 Years
|
Year
|
Males
|
Females
|
Both
Sexes
|
Males
|
Females
|
Both
Sexes
|
Males
|
Females
|
Both
Sexes
|
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
Jan.
Feb.
Mar.
April
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
|
15.1
18.0
20.9
21.5
20.1
19.0
20.9
22.2
21.5
19.6
22.1
22.3
21.5
22.3
21.1
16.4
21.1
17.4
18.6
17.9
18.4
16.6
|
12.4
14.5
16.8
16.9
15.9
15.8
17.3
19.8
18.0
16.7
15.4
17.1
16.4
19.4
19.5
18.3
18.9
14.6
16.9
15.9
15.9
12.0
|
13.9
16.3
19.0
19.3
18.1
17.5
19.1
21.1
19.8
18.2
18.8
19.7
19.1
20.9
20.3
17.3
20.0
16.1
17.8
17.0
17.2
14.3
|
12.7
18.9
18.8
18.4
16.6
14.6
14.5
14.1
13.6
12.6
15.5
14.8
14.3
15.3
15.4
11.7
11.0
9.3
10.8
10.8
10.4
12.0
|
10.0
11.6
12.6
12.6
11.9
11.1
11.2
12.1
10.6
9.8
10.1
9.1
9.5
10.2
12.8
11.0
10.2
9.0
10.4
9.7
8.1
6.9
|
11.4
15.4
15.8
15.7
14.4
12.9
12.9
13.1
12.2
11.3
12.9
12.1
12.0
12.9
14.2
11.4
10.6
9.2
10.6
10.3
9.3
9.7
|
13.7
18.6
19.6
19.6
17.9
16.3
16.9
17.2
16.6
15.4
17.9
17.6
17.1
18.0
17.6
13.6
15.4
12.7
13.7
13.5
13.4
13.7
|
10.9
12.8
14.3
14.3
13.5
13.0
13.6
15.1
13.6
12.5
12.2
12.2
12.2
13.9
15.4
13.9
14.0
11.4
13.0
12.2
11.2
8.9
|
12.4
15.8
17.1
17.1
15.8
14.7
15.4
16.2
15.2
14.0
15.1
15.0
14.7
16.0
16.6
13.7
14.7
12.1
13.4
12.9
12.4
11.5
|
Revised data based on the
new method of estimation and population counts based on the 1996 Census.
Source: Labour Force
Survey, Statistics Canada.
Table
2
UNADJUSTED YOUTH
UNEMPLOYMENT RATES
BY PROVINCE, BOTH SEXES (%)
Year
|
Nfld.
|
P.E.I.
|
N.S.
|
N.B.
|
Que.
|
Ont.
|
Man.
|
Sask.
|
Alta.
|
B.C.
|
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
Jan.
Feb.
Mar.
April
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
|
24.8
27.7
29.5
30.6
29.7
26.8
28.3
26.1
27.9
27.1
31.5
28.2
29.4
31.4
33.2
26.1
25.0
21.0
27.7
27.8
24.4
19.5
|
19.4
22.0
23.3
22.8
20.8
19.0
17.8
17.7
17.3
18.5
27.4
23.3
26.6
25.2
19.3
10.5
14.3
10.3
15.6
16.3
17.1
16.3
|
15.4
19.5
20.2
21.4
22.0
18.8
17.5
20.9
19.4
18.2
20.4
21.6
21.4
23.7
25.2
19.2
15.3
14.5
15.2
13.9
14.0
14.3
|
19.1
20.3
21.1
19.6
18.9
17.3
18.4
20.4
18.5
16.4
18.6
19.9
17.2
19.5
19.6
12.5
14.5
13.3
16.9
15.1
15.0
15.1
|
14.8
18.2
17.6
18.8
16.9
16.0
18.2
19.3
17.6
15.8
18.1
16.3
15.8
17.5
17.0
17.0
16.0
14.1
14.7
15.0
14.2
14.0
|
10.0
14.9
17.3
17.4
15.5
14.5
14.9
16.3
14.4
13.1
13.6
14.7
14.4
16.0
16.5
12.6
14.8
10.5
12.5
11.7
10.3
9.6
|
12.6
14.5
15.4
14.9
15.0
12.1
11.9
11.5
10.5
10.1
12.1
9.8
9.8
10.7
9.8
9.3
9.9
9.2
11.2
10.9
9.9
9.1
|
11.9
13.0
14.1
14.0
12.2
11.5
11.8
10.3
10.7
11.9
13.6
14.1
14.7
13.6
15.5
10.8
11.9
10.6
10.5
10.2
8.9
8.3
|
10.5
11.6
13.7
13.4
12.6
11.7
11.5
10.9
10.2
11.8
11.6
10.4
11.0
11.3
14.8
8.9
12.3
12.0
13.0
12.1
13.7
11.0
|
12.8
14.9
15.5
13.9
14.5
14.1
14.2
15.2
17.3
14.3
15.2
15.9
15.0
15.8
15.5
15.3
15.2
12.7
12.6
12.3
13.5
12.3
|
Revised data based on the
new method of estimation and population counts based on the 1996 Census.
Source: Labour Force
Survey, Statistics Canada.
*
The original version of this Current Issue Review was published in
January 1982; the paper has been regularly updated since that time.
|