Toronto, ON - Young Canadians are bearing the brunt of a turbulent economy, facing the highest youth unemployment rate in a quarter-century, excluding the pandemic. This "youth-cession" is characterized by widespread job losses, dwindling opportunities, and heightened financial anxiety for Gen Z.

The latest figures paint a stark picture. In August 2024, the unemployment rate for youth aged 15-24 surged to 14.5%, more than double the rate for core-aged workers. For those aged 15-19, the situation is even more dire, with an unemployment rate of 19.6%. This represents a significant jump from the previous year and marks the highest level since the mid-1990s.

The challenging job market is leaving many young people in a precarious position. A recent report revealed that only 41% of Gen Z are employed full-time, with nearly one in five being unemployed. With an average monthly income of just $1,083, it's no surprise that only 29% feel financially stable.

A Perfect Storm of Economic Pressures

Experts point to a "perfect storm" of economic factors converging to create this hostile environment for young workers. The key culprits include:

• Soaring Inflation and Interest Rate Hikes: An aggressive interest rate cycle, initiated to combat rampant inflation, has led businesses to curb spending and delay hiring, particularly for entry-level positions.
• A Surge in Population and Labour Force Growth: A significant influx of newcomers and a larger cohort of young Canadians entering the job market have outpaced the number of available positions.
• Decline in Youth-Centric Industries: Sectors that traditionally employ a large number of young people, such as retail and food services, have seen significant job declines. Over the last year, youth employment in retail trade and accommodation and food services fell by 8.3% and 8.0%, respectively.
• Automation and AI Disruption: The automation of routine tasks and the integration of artificial intelligence are reshaping entry-level jobs, further limiting opportunities for those just starting their careers.

The summer job market, a crucial entry point for many young people into the workforce, has been particularly bleak. The unemployment rate for returning students this past summer was the highest it's been in over two decades, outside of the pandemic years.

The Human Cost of a "Youth-cession"

The impact of this challenging job market extends far beyond mere statistics. Young Canadians are experiencing heightened levels of financial stress and anxiety about their future. Many are being forced to take on gig work, cut back on essential spending, and even borrow from family to make ends meet.

The long-term consequences of youth unemployment can be severe, potentially leading to lower lifetime earnings, a higher probability of future unemployment, and diminished overall well-being.

The situation is even more acute for racialized and Indigenous youth, who face significantly higher unemployment rates than their non-racialized peers. In August, the unemployment rate for racialized youth stood at a staggering 18.8%.

Government Initiatives and an Uncertain Future

In response to the growing crisis, the federal government has proposed initiatives such as the Youth Employment and Skills Strategy Program, aimed at creating more job placements and support for young Canadians. However, with economic uncertainty looming, the road ahead for Gen Z in the Canadian job market remains challenging.

As one expert noted, youth unemployment can be a "canary in the coal mine," signaling broader troubles within the labor market. The current "youth-cession" serves as a stark warning that without targeted and effective interventions, an entire generation of Canadian workers could be left behind.