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When reality bites

Recessions hit young people hardest—even long after they’re over


 
When reality bites

Photograph by Andrew Tolson

During his final year at the University of Ottawa, Justin Cantin had one goal for his first job after graduation: not to wear a uniform. Ideally, he hoped to put his undergraduate degree in history to work in a museum or doing research. But after graduating last December, in the aftermath of the most severe recession in decades, reality hit. With $45,000 in loans, the 23-year-old moved back in with his mom in Mississauga, Ont., and started sending out resumés. He soon broadened his search to include part-time jobs, factory positions—“whatever would give me a paycheque,” he says. Last week, he landed a warehouse gig in Waterloo, Ont. Though relocating for a manual labour job is not something he ever imagined he’d do, he says, “It’s better than nothing.”

As Cantin struggles to adjust his expectations, he can take comfort, however cold, in the knowledge that many of his peers are doing the same. Though it’s been months since Canada’s economy returned to growth, recessions have a way of bearing down hard on youth, even long after they’re officially over. Predominantly employed in industries like retail and food service, which depend on consumer demand, or in unions where seniority rules, youth tend to be first on the chopping block when the economy goes south. This time was no different: since October 2008, more than 190,000 jobs for young people have disappeared; unemployment among 15- to 24-year-olds rose to 16.3 per cent in August 2009, almost double the overall rate.

Although jobs are slowly coming back—as of February, youth unemployment had dropped to 15.2 per cent—what’s on offer is hardly the stuff from which middle-class careers are made. Thanks to the disappearance of manufacturing jobs, hiring freezes and the delayed retirement of workers, for many the reality is a spell of unemployment or a low-paying gig—both of which can have lasting consequences, derailing careers for years to come. While it’s impossible to know how much their future will be shaped by the Great Recession, one thing is clear: the generation raised to believe in the limitlessness of their own potential has just been dealt a very unlucky blow.

Strictly in terms of unemployment, this recession has not been as cruel to youth as other downturns. In August 1992, unemployment for those aged 15 to 24 shot up to 18.4 per cent; in the early ’80s, it reached 20.6 per cent. But according to Armine Yalnizyan, an economist at the Canadian Centre for Policy Alternatives, it’s the kind of jobs that were lost that’s cause for concern. Whereas the recession in the early ’80s replaced full-time jobs with part-time jobs, and the one in the ’90s replaced traditional employment with self-employment, this downturn “seems to be replacing permanent jobs with temporary jobs,” she says. “Where is the next generation of middle-class jobs going to come from?” she asks. “There’s just nothing coming up on the menu.”

The best way for youth to survive the hostile job market, say experts, is to wait it out by investing in school or volunteer positions. The trouble is that with median family incomes slipping, indebtedness at record highs and boomer parents struggling, many youth can’t afford to delay working. To make matters worse, says David Green, an economist at the University of British Columbia, the social safety net is not what it once was. While 83 per cent of those who were unemployed at the beginning of the recession in the early ’90s qualified for jobless benefits, this time only 43 per cent qualified. And incomes aren’t what they used to be either: though new workers began to gain ground again in the mid-’90s, at the start of the recent recession, says Green, they were still facing real wages below those of their counterparts in the early ’80s.

For youth who are unable, or unwilling, to prolong their entry into the job market, breaking in during a downturn is an uphill battle. When Amanda, who asked that Maclean’s not use her last name, got her undergraduate degree in math last June, she wanted to get a job as an analyst. But after four months of unemployment, she took an entry-level position at a Toronto IT firm. While her friends who graduated with similar credentials just a few years earlier started out making about $40,000, she’s earning $30,000.

In fact, most young people entering the job market now are making less than peers who found jobs two or three years ago. “And that lasts for quite a while,” says Paul Beaudry, Canada Research Chair in Macroeconomics at UBC. A study of Canadian men who graduated with B.A.s over almost 20 years found that, on average, those who begin their careers in down times tend to do so at smaller firms that pay less, suffering an eight to nine per cent income hit. And it takes 10 years to catch up to those who graduated in boom times. Worse still, for those who graduated from less prestigious universities with degrees in lower-paying fields, the scarring effect on their earning potential “sort of remains permanent,” says Phil Oreopoulos, a University of Toronto economics professor who co-authored the study.

The prospects are bleaker for those without post-secondary education. “Employers out there, they’re asking for everything—the moon and the stars,” says Joan Gardener, project administrator at the Mississauga, Ont.-based Youth Community Connections, a government-funded program that serves out-of-work young people. For those who do manage to secure employment, the erosion of high-paying, middle-class manufacturing jobs means it’s tougher to get ahead. “Think about it as a career ladder with the rings in the middle all being missing,” says Morley Gunderson, an economics professor at U of T. “You don’t have a way to start at the bottom and move up anymore.”

When reality bites

Photograph by Andrew Tolson

Coming of age in a time of economic uncertainty can also take an emotional toll. In the five months since Rajinder Ghoman was laid off from her customer service job with British Airways, the 27-year-old single mom, who is living with her parents in Brampton, Ont., has spent her days attending job fairs and scouring the Internet for openings. But after submitting more than 50 applications, she’s only received three calls—none have ended in an offer. With her Employment Insurance set to expire in two months, she says her self-esteem is “not too good right now.”

While most of the country’s unemployed youth will eventually find jobs, studies suggest that these experiences can have lasting psychological effects, too. A recent article in The Atlantic cited a battery of disheartening findings: individuals who endure long bouts of unemployment in their teens and early 20s are more at risk of developing drinking problems; those who started their careers during Japan’s “lost generation” now account for 60 per cent of employer-reported cases of depression and stress; and periods of unemployment, especially early on, literally shave years off of a person’s life.

Academics have, understandably, been quick to reverse the rosy futures they once predicted for today’s youth. Some have gone so far as to say that the “millennials,” who were once described as an entitled generation with a poor work ethic, are at risk of becoming lost. Like the children of the Great Depression, the argument goes, these kids will have their ambitions thwarted by uncertain times, and hold on to their jobs—and pennies—for dear life.

But according to Beaudry, this is “an exaggerated kind of comparison.” While the relative losses have been substantial, the fallout we’re currently experiencing is nothing like what occurred in the 1930s. Today’s kids are also much more affluent than they were back then. As Douglas Porter, deputy chief economist for the Bank of Montreal, points out, even with the recent setback, the markets are still higher than they were 20 years ago, and “when you look at the household balance sheet,” he says, “a lot of the losses have been recouped.” Add that to the fact that government has been focusing on job creation, and the outlook is more optimistic. “We can turn this thing around without doing lasting damage to the prospects of youth today.”

To minimize the implications, says economist Yalnizyan, government should do more to improve access to Employment Insurance and social assistance. “We should be enhancing those automatic stabilizers that prevent the middle class from entering economic free fall,” she says. At the same time, the downturn, she adds, is an opportunity to make tuitions more affordable and address the impending shortage of trained professionals in fields like medicine.

As for Cantin, he’s looking at the warehouse job as a stopgap until he goes back to school—something he’s been thinking about a lot in the past few months. He hopes a master’s in history will be enough to land his dream job. But part of him wonders if he’ll just be digging himself an even larger financial hole, only to get stonewalled again. “I try and stay optimistic. But for the most part,” he says, “I just try not to think about it.”


 

When reality bites

  1. Solution: Learn a trade – there's still huge demand for those, and you get to be creative and active

    • Dam straight however don't expect to make any money until the boomers @#$% off and retire already. I know I am a TRADESMEN and I still make less than $40,000 a year and I have been working for 20 years.

  2. Solution: Learn a trade – there's still huge demand for those, and you get to be creative and active

  3. Solution #2: Stop following, and start leading. Stop expecting a job to be handed to you a person like you simply because a person like you used to be handed a job. The past is past. Basing your future expectations solely on past circumstances is a recipe for disappointment, as you have a learned. You have to make the choice to improve your life, to make yourself indispensable.

    • what a motivational piece… im inspired.

    • What a load of coarse its up to us! that way the boomers can remain our friends !@#$ them and the horse you rode in on!!!

  4. Sometimes we all need a big helping of humble pie…

    • @#$% you!! nuff said

  5. Ah yes that me generation telling its kids to "suck it up and try harder." Perhaps it is time to examine the people behind this recession rather than continue the "young kids these days" stereotype.

    • No, I'm 23 and I'm telling my own generation to suck it up.

      • well I think you are brainwashed there

  6. To Mr Cantin, and others like you: Before you spend another nickel taking more courses or degrees use the research skills that you have already gained at university to investigate what occupations are in demand. A good job for you to do is the intersection of three sets: the set of jobs that you can do (and are qualified to do), the set of jobs that you like to do (at salaries of interest to you), and the set of jobs that is available in the market.

  7. Well, from the first few comments here I see the destruction of our country is just about complete. We now seem to have inter generational warfare breaking out. I feel sorry for kids today. There is nothing for them. Period. What did the "experts" think would happen when all the decent middle class jobs were shipped off to third world hell holes to be done by child slave labour? How do you think the world's billionaire class went from a handful to several thousand? It takes a lot of people working for nothing for that to happen. Let's face it, the powers that be always found the middle class troublesome(the peasants are revolting!), and threw them overboard at the first opportunity. Mission accomplished.

    • here here!!!

  8. Too many people are chasing something that doesn't exist. The world can only use so many museum curator's, film critics, psychology researchers and journalism interns.

    You can't cry "unfair" if you're setting yourself up for disappointment. This is not an indictment of the humanities, having studied them myself. However, I would caution a student's expectations of "awesome" employment.

    Demand for certain jobs are fairly inflexible. An economy requires these manufacturing jobs, trades, etc. There's no shame in them. But millions of university grads are treating these positions as if they are shameful.

    • WELL i DON'T NOW ABOUT manufacturing jobs but as a tradesman yes I make as much or more(some of boomers I know make $100,000+ a year) than the average university grads never mind college grads. However there parents have taught them that a TRADE is not valuable or needed?!?! Well I guess the next time one of them calls me I will tell him to do it themselves!! LOL yay right!!!

  9. The 45G loan sounds real bad – I can buy every written word about the history of the world on Amazon for maybe 20G – oh well – blame your parents

    • You know in history books how they kind of glance over the people who died in battle, people who starved to death, or people who died in some plague/natural disaster (perhaps 'glance' is unfair but it is hard to relate to in text). Well, read those same books while being unemployed or in a shiatty job, and it gives you an 'a-ha that sucked' moment .

      Same goes for economic undergraduates; you know, when the prof or media commentator uses language such as 'challenges' or 'under-utilization' well, it results in another 'a-ha' moment.

      an education and it's free!!!

    • The idea of a history or english degree is not to simply absorb the information like a sponge, it is to learn how to think critically, engage in debate, conduct research, and meet deadlines.

      While the direct and indirect benefits/career options of arts degrees can be limited, and while there is certainly a glut of said graduates in these degrees, it is an oversimplication to say that the same education can be acquired by purchasing a bunch of books.

      Outlining the shortcomings and limitations of such degrees is one thing, misrepresenting their nature and benefits is an entirely different matter.

    • You wouldn't be able to buy every book written about Napoleon for $20G, let alone every history book ever. The second point is a good one though.

  10. My niece recently told me how frustrated she was with the job search after finishing her Arts degree. I offered her some advice but I don't think it's sunk in yet.
    I told her that young people today should interview survivors of the Great Depression. They would provide a lesson on attitude, motivation and self reliance. I am not old enough to remember the Great Depression, but I have learned all my most valuable business lessons from those who went through truly tough economic times.

    Here is some free advice:
    -Put a note in your neighbours' mailboxes and let them know you are available to work on housecleaning, snow removal, lawn mowing and chores. At $10 or $15 per hour, you will find customers.
    -Put up pamphlets offering tutoring services for youngsters or new Canadians. If you can teach a musical instrument, all the better.
    -Take a job in a warehouse, restaurant or store. Take two or three jobs. You are young and have plenty of energy. When higher paying positions come up in these workplaces, apply for them and present yourself well with bosses and during interviews.
    -If you live at home, save 50% of all your earnings. This is not a joke. Some savy young people are able to save 75% of their earnings. Cultivate a strong work ethic and look for opportunities everywhere.

    To the young man in the picture accompanying this article: Your room is a mess; clean it up and get organized. Your mother has been kind enough to provide you with room and board. You are a grown man. In many countries, you would be supporting your parents. Not only should you be cleaning up your room, but you should be doing the bulk of the chores around your parents' home. Earn your keep.

    • YOU NOW WHAT BLOW ME!! I SURE AS @#$% DON'T CARE WHAT MY DEAD GREAT GRAND PARENTS OVER 60 YEARS AGO, I CARE WHAT WAS HAPPENING TO YOU BOOMERS 30-40 YEARS AGO YOU SELF RIGHTEOUS ASS@#$%(I ASSUME YOU ARE A BOOMER WITH STATEMENTS LIKE THAT BET YOU NEVER HAD TO DEBASE YOUR SELF JUST TO LIVE) RETIRE ALREADY AND LET SOME OF US 30 SOMETHINGS FINIAL' Y MAKE SOME @#$%ING MONEY YOU SELFISH PRICK!!!

  11. YEA WELL WELCOME TO THE GEN-X REALITY AND THE BOOMERS STILL DON'T KNOW WHY WERE SO PISSED OFF. THEY COULD JUST IGNORE US BUT NOW THAT THEIR LITTLE BOY OR GIRL IS SUFFERING "OH NO WHAT EVER WILL WE DO"!? .
    MAKES ME SICK! HERE'S TO ALL THE BOOMERS !#@!@#ING DIEING ALREADY!!!

    • George Bay, you sound like a mindless drone. Quit preaching to people about your ideals in life and realize some people think it is inhumane to submit themselves to soul-crushing labor to appease an outdated mentality that the only thing this temporary life consists of is going to work 9am-5pm, retiring then shortly afterward dying. Maybe you should get a fucking soul before you start judging other people for being in the situation they are in.

  12. yes true less arts and humanities more MATH and science and medical no more lawyers though have more than enough.

  13. The problem lies in the perceived solution – they don't know how to distinguish themselves. Maybe they don't have any hidden talents, and are just destined to work for the money dependence. They did too much, too early. Take a number; get in line.

    I took an alternative approach – applying what I do best with what I enjoy doing best – where the confidence and passion will shine above the desperation of others. I still experienced the forefront of the economic collapse (amongst this country's "top" media) and am enduring the fallout. But it was probably the best thing to happen for me. Broke and hungry? Yes.

    I am 24 and didn't learn a thing during two years of university, followed by a fast track year of college, where I would have had more enjoyment by flushing my student loan down the toilet.

    I have always found more success in extracurricular activities where I could apply my ingrained creativity and actually enjoy the learning process (self-directed). Fortunately for me, I have recognizable talent and a perception that some businesses value. The only reason I went to school was to satisfy my parents, who still think that is the answer.

    All I have learned from school is to not be a sheep being herded to the slaughterhouse. Sure, university education worked for my other generations, but the reality now (as this article clearly illustrates) is seemingly everyone who has a piece of paper wants to do something with it and when they can't, they settle for whatever else they can. There's not enough room for the whole herd in either their ideal or secondary or third choice positions. Be distinguished… and having a Master's hanging on the wall is no longer distinguished. 'You gave a school too much money and handed in your assignments… good job?'

    Luckily I also learned valuable lessons from the Army about endurance and sacrifice. And how bureaucracy hinders more than it helps.

    This is 2010. You can't look to the Great Depression or the 80's or the 90's. We must look at today and tomorrow, recognizing that we shape it. Life may be a Science, but Living is an Art.

    • I agree with your notion that university is not the only solution but you sound like an egomaniac assuming the reason why you are able to endure this economic recession is due to your "recognizable talent and a perception that some businesses value". I got some news for you…you are not a beautiful or unique snowflake. You are part of the same, dying organic matter as everything else. I appreciate your point of view as it seems more level-headed than the one expressed in the article but stop assuming your flourishing in these conditions because you're somehow special; you're not.

  14. If you graduate during a recession, good luck catching up. I am a Gen Xer who graduated from university in 1993, right at the end of the last recession, when governments were cutting budgets and jobs severly. I finally started my own business and was very successful for 10 years, but I have never had the security or financial rewards my education and hard work might have provided in a strong economy.
    ".
    Angela

  15. We Gen xer's will have to accept the fact that we will always live in the shadow of the boomers. They refused to supplement our education costs, ( their own costs were heavily supplemented)but will be happy to spend our pensions.They took the jobs and stiffiled our career advancement. They will fill the retirement communities and hospitals , and my pension will be paying the bills, if another self-centred Boomer tries to explain to me why it is my ( or my generations ) fault, I will tell them to "stick it in their ear"
    Angela part 2

  16. I too have an undergraduate history degree from the University of Ottawa (2006) and never expected to find my dream job out of university. This article makes it seem as though it is impossible to find work. It is, you just have to know how to look. I went back to school for one year and did a museum management diploma in college. College was the greatest asset in searching for employment not only because of the volunteer and networking opportunities available to me but because i learned REAL skills. My first museum job paid $27,000 (gross) after a 4 month unpaid internship. It wasn't great but I made it work and worked part-time to cover my expenses.

    I no longer work in museums because I found something outside the sector where my skills would still be valued. One cannot expect to get a great job after obtaining a liberal arts degree, it is great when it happens but one needs to be realistic.

    I have friends who make more money than me and mostly it is because they work in government but that has not been my path. I am very content as a 26 year old with the job experience and I have and where my life is going. I have a sister who is 24 and also struggled-but like me she turned to college to learn additional skills in her chosen field.

    Articles like this paint a dark portrait and only propagates the image that the outlook is bleak.

    Give me a break!

    • "Articles like this paint a dark portrait and only propagates the image that the outlook is bleak. " – AGREED!

      From the article: "periods of unemployment, especially early on, literally shave years off of a person's life." – What scientific analysis is this based off? Does it not depend on a number of variables, i.e. your living conditions during your bout of unemployment, how healthy you are during tough economic times, etc.? It just seems like a scare tactic to me. "If you don't get a job NOW you are going to die young!" Please…I have been unemployed for a while now and I feel fine. I understand a job is necessary to provide the basic necessities I need to survive but I wouldn't assume having to go to some banal job 40 hours a week is going to prolong my existence; if anything I would think it will kill you quicker. Cormac McCarthy, the author, has it right: Work to avoid working. In other words, work hard and apply yourself in order to support yourself so you can avoid having to work at some job you hate and can instead focus more of your energy on doing the thing(s) you love.

  17. "Articles like this paint a dark portrait and only propagates the image that the outlook is bleak. "

    From the article: "periods of unemployment, especially early on, literally shave years off of a person's life." – What scientific analysis is this based off? Does it not depend on a number of variables, i.e. your living conditions during your bout of unemployment, how healthy you are during tough economic times, etc.? It just seems like a scare tactic to me. "If you don't get a job NOW you are going to die young!" Please…I have been unemployed for a while now and I feel fine. I understand a job is necessary to provide the basic necessities I need to survive but I wouldn't assume having to go to some banal job 40 hours a week is going to prolong my existence; if anything I would think it will kill you quicker. Cormac McCarthy, the author, has it right: Work to avoid working. In other words, work hard and apply yourself in order to support yourself so you can avoid having to work at some job you hate and can instead focus more of your energy on doing the thing(s) you love.

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