The Big Picture
If you were casting Katie Daniels for a movie, she would be a lock for the sunny, can-do girl next door.
But the day I meet this 26-year-old, her brow is clouded with concern.
Life has not been going according to plan.
“Do what you’re told. Do the right thing, and good things will happen to you.”
That was her credo since she was a kid, growing up in the small town of Brighton, Ont.
When she was 14, her parents gently kicked her out the door and told her not to come home until she had found a summer job. She has been earning some sort of wage ever since.
Daniels has always worked hard, she tells me. It paid off in track, soccer and rugby. She studied hard in high school, too. Four universities offered her scholarships.
But she chose the only one that accepted her without offering her money, the University of Toronto.
She believed a degree from a university touted as Canada’s Harvard would give her an edge. She studied political science with an eye to a career in public policy. But on this day in 2011, two years after graduating with her bachelor of arts, she is still waiting on tables.
“I feel like I was sold a bill of goods,” she says.
“I used to know the path,” she continues. But now she isn’t so sure.
Should she pursue a master’s degree? What if that turned out to be a false promise too?
By serving at Sapore, an upscale restaurant in Woodbridge, she has paid off a $27,000 student loan in just two years. If some people look down on her, who cares? The money is good.
And yet she yearns for something better, or at least something different.
Four years ago in September, Lehman Brothers, the investment bank, filed for Chapter 11 bankruptcy. For years, U.S. lenders had sold dodgy sub-prime home mortgages. They bundled them together, packaged them like Russian dolls, tied them with a ribbon, and resold them to a market blind to risk and hungry for a quick profit.
When the band stopped playing, international credit froze. Global stock markets crashed. And consumers curled into a fetal position. For a while, the developed world teetered on the brink of a Depression.
For Canadian youth seeking work, September 2008 was the last best month before the economy tumbled into recession. The number of 15- to 24-year-olds with jobs was the highest in a generation — since March 1982, in fact. The youth unemployment rate was 11.1 per cent, roughly what it had been for two years.
In November 2008 the Canadian economy began shedding jobs. By the following summer, the youth unemployment rate had ballooned to 16.4 per cent. Eventually the rate settled in the 14- to 15-per-cent range. The most recent seasonally adjusted unemployment rate for 15- to 24-year-olds is 14.7 per cent.
The jobs picture is not bleak for everyone. The unemployment rate for older workers, that is, those 25 years old and up, has fallen to 6.2 per cent, just 1.2 percentage points above pre-recession levels. But the youth unemployment rate remains stuck roughly where it was three years ago.
There are a couple of important points to understand about job statistics. First, the unemployment rate is a blunt measure of the health of the labour
If you are discouraged and have given up looking for work, you don’t count as unemployed. You are deemed “not participating” in the workforce. If you are a PhD who can only find work driving a taxi, you count as employed. If you work part-time, you count as employed even if you would prefer full-time work.
Sometimes economists use a broader measure called the “R8,” or supplementary unemployment rate, to take into account some of these characteristics. The R8 includes the unemployed plus those who have given up looking for work, those waiting to start a job and involuntary part-time workers.
The involuntarily part-time are by far the largest of these “add-ons” groups. In July 2012, the supplementary unemployment rate for youth was 20.7 per cent (not seasonally adjusted). By comparison, in July 2008, just before the recession hit, it was 17.1 per cent.
The second point about the labour market is that it is dynamic. Even when the unemployment rate is stable, the individuals who are jobless keep changing.
In a recession, though, it takes longer to find work. These days roughly one in eight unemployed 15- to 29-year olds has been looking for work for more than half a year. That is about double what the rate was four years ago.
It is easy to drown in these statistics. Believe me, I struggle myself sometime. But here is one critical number to remember: 266,000.
There are 266,000 fewer 15- to 24-year-olds working now than in that last best month four years ago.
Almost all of those 266,000 lost jobs were in the 15- to 19-year-old group. In other words, those with little more than a high school education, and some with less.
That doesn’t mean it’s all roses for college graduates. Many better-educated twentysomethings — like server Katie Daniels — are underemployed. They have settled for jobs that pay the rent, but in no way require a university education.
It’s not that these are “bad” jobs. It is just that they usually pay poorly, are insecure, lack benefits and require little of the higher learning associated with a university degree.
This group — the art historian pouring your morning coffee or the bachelor of science selling you an iPad — is growing.
Tom Zizys is an economist and policy analyst. While working for the Toronto Workforce Innovation Group, he tracked this trend. In 1996, 18 per cent of university graduates in Toronto worked in jobs that required only a high school education. By 2006, the percentage had jumped to 34 per cent. One in three.
An undergraduate degree has become the new high school diploma. What has happened is that the well educated are pushing 15- to 19-year-olds out of jobs.
Meanwhile, the underemployed university grads represent a squandering of money — theirs, their parents’, that of the public purse. Weighed down by student debt, they bide their time at jobs with no connection to their training.
Their skills grow rusty. As time passes, employers stigmatize them. When a decent job does come up, the freshly minted graduate has the edge.
There is ample evidence that the underemployed suffer long-term reduced earnings. In the meantime, jobs in some sections of the economy go begging because of a shortage of people with the right skills.
How did it come to this?
It’s partly the result of the recession. The young are always the first to be let go. But youth joblessness has become entrenched because of long-term structural changes in the economy and the labour market.
Globalization has exported jobs. This has unfolded in two waves. The first was driven by the low wages of Asia, the second, by the Internet.
David Ticoll is special adviser to the Canadian Coalition for Tomorrow’s ICT Skills, an organization that promotes the labour needs of the information, communications and technology sector. He notes that IT work, which he describes as “programming, call centres, legal research, even some journalism,” has moved offshore. “Even transcription of medical records might happen in India.”
This has transformed Ontario into what Zizys calls an hourglass jobs market. In a report for the Metcalf Foundation, Zizys analyzed the changes in Ontario’s
labour market from 1991 to 2006. The number of middle-tier jobs has stagnated. Job growth has come in the low-wage service economy and in the well-paying knowledge economy.
The hiring practices of corporate Canada have also changed, and they have hurt young people entering the workforce. A generation ago, large companies
invested more heavily in training. This enabled entry-level employees to work their way up in an organization. Companies hired from within.
That’s been replaced by just-in-time hiring of people with exactly the right credentials, training and experience. The effect is to kick out the middle rungs of the career ladder. In a hiring environment in which the currency is experience, the young are beggared.
Precarious employment — short-term contracts, part-time, on call — has become the new normal. In 1989, 11 per cent of newly hired employees in Canada held temporary jobs. By 2004, 21 per cent of new hires were temporary.
And so people like Torontonian Eleanor Edgar, 29, cobble together a portfolio of jobs. Edgar earned her master of social work degree from York University in 2010. When I first met her, she was working on two contracts that employed her a total of four days a week. Those came only after a long and difficult job search, a process she was girding herself for once again. One of the part-time jobs was about to end because the grant money was running out.
Of course, young adults make the best of the situation. Precarious work can be a way of trying out different occupations and work settings. They use their spare time for their passion projects.
They make a virtue out of the shabby chic lifestyle. If they have no dependents, they can survive on less. But that wears thin after a time. One twentysomething told me, “When do I get to stop living like a student?”
For employers, this no-commitment world of flexibility is a dream come true. It is their version of “friends with benefits,” but without health and dental if you’re the temp. This is cost-efficient for the boss. But long-term, it may be self-defeating.
“At the beginning there is nothing particularly wrong with hiring people on a temporary contract basis,” Stefano Scarpetta told me. He is a senior labour economist for the Organization for Economic Co-operation and Development. “The risk is when temporary contracts become the norm. It becomes a vicious circle.
“Firms are less eager to invest in training for those who work on temporary contracts. There’s no way the investment would be worth it because the young person might leave.”
In fact, investment in employee training is declining in this country. According to a 2011 study by the Conference Board of Canada, spending per employee on on-the-job training has declined 40 per cent since 1993.
“The worker involved in a temporary contract may be less eager to invest in specific training because he might not be able to stay in the company,” Scarpetta says. “It’s not a path to building a career.”
Nor is it a path to building the skilled labour force that corporate Canada yearns for.
While serving diners at Sapore, Katie Daniels continued to aspire to something better.
A few months after we met, she wrote the Ontario civil service exams in a room with 3,000 other hopefuls. It was a reality check.
After searching for that elusive public policy job for two years, she was ready to give up.
In November 2011, she decided to act on an offer that a regular patron of Sapore had made a few months earlier, if it was still available. It was, and Daniels wnt to work in sales for a Brampton-based document and services outsourcing company, Formost mediaOne.
Eleven months into the new job, she earns less than she did as a waitress. But Katie Daniels, now 28, feels like she’s building a future.
But what is to become of the young who remain jobless or underemployed and frustrated? What can we do to change things?
I spent a year in the field looking for answers. Sadly, there is no magic bullet. And yet, I found all kinds of hopeful ideas and inspiring examples. I’ll be telling you about them in the days ahead.