Generation Y Gets The Short End

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Yesterday, the Guardian reported on a study which has concluded that, across the world, Generation Y is getting shafted:

A combination of debt, joblessness, globalisation, demographics and rising house prices is depressing the incomes and prospects of millions of young people across the developed world, resulting in unprecedented inequality between generations.

A Guardian investigation into the prospects of millennials – those born between 1980 and the mid-90s, and often otherwise known as Generation Y – has found they are increasingly being cut out of the wealth generated in western societies.

Where 30 years ago young adults used to earn more than national averages, now in many countries they have slumped to earning as much as 20% below their average compatriot. Pensioners by comparison have seen income soar.

The news is really quite depressing:

In seven major economies in North America and Europe, the growth in income of the average young couple and families in their 20s has lagged dramatically behind national averages over the past 30 years.

In two of these countries – the US and Italy – disposable incomes for millennials are scarcely higher in real terms than they were 30 years ago, while the rest of the population has experienced handsome gains.

It is likely to be the first time in industrialised history, save for periods of war or natural disaster, that the incomes of young adults have fallen so far when compared with the rest of society.

In the United States, we are currently witnessing what happens when an entire social class is left behind. Now an entire generation is being left behind. Caelainn and Shiv Malik write:

• Prosperity has plummeted for young adults in the rich world.
• In the US, under-30s are now poorer than retired people.
• In the UK, pensioner disposable income has grown prodigiously – three times as fast as the income of young people.
• Millennials have suffered real terms losses in wages in the US, Italy, France, Spain, Germany and Canada and in some countries this was underway even before the 2008 financial crisis.

The Masters Of The Universe have done the young no favours.

Strangling Our Future

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Youth unemployment is a problem world wide. Carol Goar reports that:

Our youth unemployment rate is 13 per cent. In Sweden, 19.4 per cent of young people are looking for work. In France, the youth jobless rate is 25.9 per cent. In Spain, it is 46 per cent. In Greece it is a staggering 48.6 per cent. (It is hard to get comparable statistics from Africa, where youth can mean anything from 12 to 30 years of age.)

The International Labour Organization -- which is sponsored by the UN -- is raising the profile of the problem:

Determined to provide impetus, the ILO launched a Global Initiative for Decent Jobs for Youth in New York this month. The UN’s 28 other agencies joined the campaign. “Today two out of every five young persons of working age are either unemployed or working in jobs that don’t pay enough to escape poverty,” said ILO director-general Guy Ryder. “Our challenge is to continuously find new and innovative solutions as we look into the future of work.”

During the Harper Era,  youth unemployment mushroomed:

Former prime minister Stephen Harper did more to undermine than assist young job seekers. Between 2006 and 2014 his government opened the floodgates to low-skilled temporary foreign workers, who took the entry-level jobs normally sought by young people.

In 2013, he claimed there was a severe skill shortage in the land. There were plenty of jobs but employers couldn’t find workers with the skills they needed. This misalignment, Harper said, was “the biggest challenge our country faces.” No one could figure out where these job vacancies were. Reporters, economists, the parliamentary budget office and the Conference Board of Canada did some digging and discovered they didn’t exist. Federal officials were relying on data from Kijiji, a classified ad service operated by eBay. It allowed employers to post the same job in various categories, which led Ottawa to double and triple count. 

Justin Trudeau vows that his government will reverse that course:

Justin Trudeau has pledged to spend $455 million a year helping young Canadians find work. His intent is to create 40,000 jobs annually by expanding Ottawa’s summer jobs program; increasing the number of co-op positions available for business and engineering students; giving a one-year payroll tax break to employers who hire young Canadians for permanent positions; and relaunching a youth service program like Katimavik, started by his father in 1977 and eliminated by the Harper government in 2012. 

But, Goar writes, most of Trudeau's efforts are focused on the public sector. More needs to be done in the private sector. Will the Captains of Industry step up? We'll see. Any society which cannot make a future for its youth is strangling its own future.

Rigged Against The Young

Newly released research has revealed that the Harper government's job creation record -- put in historical perspective -- is nothing to brag about. But its record of  job creation for young people is undeniably dismal. Armine Yalnizyan writes:

If you look at the proportion of people working by age group, this job recovery has been skewed toward Canadians aged 55 and over. Young people have seen almost no increase in their employment rate and, as you're about to read, the quality of those jobs has deteriorated. This is all the more striking because the young population (aged 15-24) did not grow, while the population of those aged 55 and over has grown by 22 per cent since 2009.

While there was a bigger, more prolonged drop in the employment rate of young workers in the wake of the 1990–1992 recession, today's young workers started off from a lower level and have, as yet, not seen any "recovery." Between 2008 and 2012, almost 30,000 people aged 15-24 wanted work but were not in the labour force and had returned to school; but this number has been falling off and has now returned to 2005 levels. We cannot compare these trends to what happened in the 1990s due to data limitations. We can only hope these investments in human capital will ultimately pay off, for the students and for society.

But, thus far, this recovery has been notable in its absence of job growth and steady job opportunities for young people. Between October 2008 and July 2009, young workers lost 185,000 full-time and 32,000 part-time jobs. Since then, they have recovered only 15,000 full-time jobs, though the number of part-time jobs is almost back to pre-recession levels. However, over the course of the past year, they lost 31,000 part-time jobs and added almost no new full-time jobs.

Yesterday, Kathleen Wynne and Stephen Harper did battle over the Ontario Retirement Pension Plan. Wynne said the plan was needed by young workers -- part of the newly dubbed precariat -- whose new normal is precarious contract or self employment. They will not get workplace pensions. Thirty years in and out with a gold watch is gone. They will know many employers in a work life that will span more than thirty years. Stephen Harper's response was:

I am delighted to see, quite frankly, that our refusal to co-operate with the imposition of this tax is making it more difficult for the Ontario government to proceed.

The day is coming when the young will take out their anger on the fat, old men who stand in their way and the system that is rigged against them.

Honey, I Abandoned The Kids

Judith Maxwell, former chair of the Economic Council of Canada, tells the Globe and Mail: “People over their forties in Canada have no idea what it’s like for a young person trying to find a pathway to adulthood right now.”

Our present political masters, focused entirely on the next quarter's results, have not given any thought to the next generation:

 While young people have always struggled to get established, economists and labour experts say this time is different. Those in their 20s today are facing far more hurdles than their parents’ generation, and those difficulties are likely to linger, with profound economic consequences for Canada. There is diminished job security, the growth of temp work, rising costs for food, tuition and housing and record debt levels. To top it off, young people entering the work force today are far less likely to retire with a company pension than their parents’ generation.

Consider the data:

The different playing field for young people today can be measured in a number of ways. One is the decline of secure jobs: The proportion of 20- to 24-year-olds in temporary positions has climbed steadily, to about 29 per cent this year from 21 per cent in 1997, Statistics Canada data show.

Full-time work is harder to find as well. Last month, a broader measure of youth unemployment – which includes not only the jobless, but part-timers who would prefer full-time work and people who’ve given up looking for work – hit 19.6 per cent, the highest level for any September in 15 years.

Today's young have been abandoned by their governments. Our leaders tell us they are focused on the future -- that is why they are cutting spending.  And, all the while, certain that their own retirements are secure, they toss the young under the bus.

A Lost Generation

While the Harper government touts its record for job creation, it never mentions youth unemployment. That's because it focuses on its core constituency -- baby boomers, like me, who have retired. For the Harperites, the young don't matter. Indeed, they are a lost generation.

Carol Goar, in the Toronto Star, invites her readers to consider the facts:

• The International Labour Organization (ILO) projects no change in the job outlook for youth until 2016 at the earliest.
 • Statistics Canada shows temporary and contract work is increasing at a faster pace among young workers than the rest of the population.
 • According to Ottawa’s labour force survey, the youth unemployment rate has scarcely budged since the recession. It peaked at 15.2 per cent in 2009. It is 15.0 per cent now.
 • The Canadian economy is undergoing profound structural change.
 • Governments are cutting thousands of high-quality jobs in the public sector.
 • And Ottawa is bringing in hundreds of thousands of temporary foreign workers to a plug holes in the labour force.

Previous studies in the United States and the UK have tracked the long term consequences of youth unemployment. In the UK:

Those who had experienced one bout of unemployment were still paying a wage penalty of 8 to 10 per cent two decades later. Those who had been out work several times were earning 12- to 15-per-cent less than their peers. Every layoff heightened the stigma they carried in the eyes of prospective employers.

Canada's present masters are intent on cutting costs. They have no desire to invest. And, by not investing in the young, they are impeding economic growth, even as they pat themselves on the back for their wise economic management.