Were labour market conditions really better for the parents of today’s twentysomethings?

In an article on youth unemployment, the Globe and Mail quotes Judith Maxwell as saying

“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.”

That seems unlikely. A 49-year-old who started looking for a job at 18 would have entered the labour force in 1981; a 40-year-old who entered the workforce at age 23 would have done so in 1995. What did the labour market for youth look like between 1981 and 1995? The answer is “not pretty”:

With the brief exception of the last two or three years of the 1980s, young people who joined the labour force between 1981 and 1995 faced conditions at least as difficult as the ones being faced by today’s youth. The boom years of the latter half of the 1990s arrived too late for people who are now in their forties.

This is not to say that youth unemployment is not a problem, that it doesn’t create personal hardship or that the concerns about the effect of the recession on human capital formation are not well-founded. It’s just not new: the parents of twentysomethings do know something about the difficulties in getting traction in a weak job market.

[Update: I just noticed that Judith Maxwell refers to those over their forties, not in their forties. But that doesn't really change the bottom line: conditions today look roughly similar to those faced by people who entered the labour force when Statistics Canada started the Labour Force Survey in 1976.]

 




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Were labour market conditions really better for the parents of today’s twentysomethings?

  1. This doesn’t address a single point made in the Globe article.

  2. Neither a 40-year-old nor a 49-year-old is a person “over their fourties”.

    • I know – I just caught that. I’ve added an update.

  3. The article is hardly all about employment – it talks about several things that make finding a foothold in the middle class way more difficult now than it was then.

    How many years’ worth of salary did the average twentysomething in the 80s need to save in order to buy a house?

    • Twenty somethings today didn’t have the crushing interest rates of up to 20%. Try again.

      • Not sure why people are thumbing you down for an incontrovertable fact. Interest rates in the 80′s were brutal.

  4. Yeah, but way back then there was no Twitter or Facebook, so no one knew your status.

    • Ahhh the vast need for plumbers….again.

      • I have no idea what you are talking about.

        My point, FYI, was that if people are talking about the issue more and more and more by tweeting, retweeting, friending etc. it can appear a much bigger issue, relatively, than w/o such amplifying mediums.

        “Going viral” twenty years ago affected rarely more than immediate family members and close friends.

        • LOL I meant that as an answer to someone else’s post…Cobra Jim…..I’m not sure how it ended up with yours…..sorry about that.

          On edit: I should add that I meant that everytime the question of jobs comes up…..somebody rushes on here to tell us about the vast need for plumbers, and how everyone should have a trade and stay out of university.

  5. I am 58 years old, a college graduate with a technology certificate from Devry. People have a choice now as we did when I entered the labour force. The trades are desperate for new blood, electricians, plumbers, welders and the pay is above average for a journeyman in any of those trades. Any one with a high school diploma can enter a trade and there is work out there for those who succeed.
    My son is 27, he has a highschool education and is working in the technology industry in sales. He is good at it and earns a decent living.
    I traveled from one end of Canada to the other to find work, working in Montreal, Toronto, Ottawa and Vancouver. Worked throughout Northern Canada and Alaska as well as the middle east.
    I am currently self employed and own a corporation that specializes in the mission critical power industry. I don’t want to work for a company and don’t have an option of a pension. I expect I will be working until I am in my 70′s providing I am still having fun.
    Many of my son’s friends have gone the University route but have chosen education which provides no practical solution to earning a living. Too bad for that.
    I know and work with a lot of young engineers who also went the path of University, but chose a path that gave them a fighting chance of finding gainful employment. These fellows and ladies are smart, capable and passionate about what they do. They are fun to work with.
    My limited experience with the young people I know who have chosen the path of unemployment due to personal preferences of not wanting to leave their home base, or who still live at home, depending on others to subsidize their lives, have only themselves to blame for their inablitily to find work.
    So my advice to the young people who are unemployed, get off your butt, take some risks, drag yourself out of your comfort zone and make a life. If you don’t there are a lot of smart new Canadians who would be more then happy to take your place and are doing so as we speak.
    Oh yeah I know my reply may not directly address the story in the globe but it expresses my thoughts and feelings concerning the unemployment of youth in our country.

  6. Every generation thinks things are tougher for them than their parents.

    Today beats graduating in the middle of the Great Depression though, or into WWI or II

  7. First of all, I am much more worried about high school dropouts and graduates then I am for university grads. Globe article is middle class twenty somethings complaining life isn’t going to plan so far.

    I graduated in 1993 and job market wasn’t good but there were far fewer university grads around. Way too many people go to uni now and so competition has greatly increased. I don’t know stats but maybe 5 uni grads would apply for one job in 1993 but now it is 15 uni grads applying for same job.

    More Canadian university grads should get on their bike and look for work overseas. Lots of jobs out in world and they are easy to find. I graduated in ’93 and job market wasn’t good but my plan was always to go London/UK and take lots of ecstasy for a year after I finished uni and let invisible hand take care of rest. I went to London/UK and worked in middle class pubs in Angel and Covent Garden, that led to teaching work in Korea and Japan, that led to more teaching work back in UK and then I came back to Canada and now work for American company that does much work with Korea and Japan companies.

    I am not a teacher but I had more teaching experience than my two friends who went to teacher’s college and were starting their careers in Ont. Find good jobs abroad where you get good, real world experience and you are often given more responsibilities than you are here in Canada.You also meet people that can further you career in future, make contacts, gain unique skills and experiences.

    One nil to the arsenal!

    • Always open to being corrected by reliable data but I would think you would have to go back much farther than 1993 to find 3 times as many people without a post-secondary degree entering the job market. Even when employment rates are similar, if the same job now usually requires four years of education – at a rising cost – the later generation still faces a disadvantage. And even that assumes the relative wages are the same across time!

    • Tony…about that Ecstasy…………

    • Ecstasy is the gateway drug to excessively quoting P.J. O’Rourke. This explains everything.

  8. In the post-war era a factory worker could make it to the middle class, support a family and house on a single income, have a life-time job with good benefits and a company pension. After 30 years of continuous corporate downsizing (which is, by no means, finished yet) how much of that is left?

    Over the past 30-year “age of greed” (founded on anti-Keynesian free-market reforms) we had an economic tide that only raised the yachts. In a functioning economy, living standards rise for all segments of society as the economy grows.

    This nihilistic free-market cult of greed is ultimately self-defeating. Businessmen are destroying the markets they need to make their riches from.

    We are already at the point where near-zero interest rates are doing nothing to produce a recovery. Eventually, like in the 1930s, the economy will fall into depression (in a deflationary-spiral the present towering levels of debt, public and private, will get much worse…)

    Of course, we don’t need to suffer through all this nonsense or reinvent the wheel. The centrist Keynesian system got us out of a colossal free-market muddle before; it can do it again.

    • Or maybe the people in the post-war era were just incredibly lucky to be living in a world where unprecedentedly rapid technical progress increased incomes regardless of the policy environment. Have you read Tyler Cowen’s “The Great Stagnation”?

      • Everybody remembers the boom of the post-war era….what they don’t remember is that it was a one-off. Much of the world was trashed by WWII, and needed goods …large and small… to rebuild. The US and Canada had lots of converted factories ….that hadn’t been bombed….and they produced all kinds of goodies…..but since then we’ve become complacent, and fallen behind

        Here’s Cowen’s TED talk on Stagnation if you’d like a short version

        http://www.youtube.com/watch?v=_93CXTt2K7c

        • Not to mention that men’s wages were boosted by the fact that women were systematically excluded from the workforce.

          • Yeah, after the war women went….or were sent….home to have babies and men took over the factory jobs. But that didn’t change things overall…..in that men didn’t want to be sales clerks, waitresses, receptionists and everything else classed as ‘pink collar’.

            Innovation died a long time ago….and we are definitely stagnating.

          • But women are going out to work in today’s economy not just because they can, but in many cases they must, and of course many simply choose to.

            Are you saying in todays environment the extra availability of labour force the wages down? If so doesn’t that support the argument people were better off in the 40 and 50 if only one person was the principle bread winner; or has it more to do with today’s higher expectations? …bigger house, fancier car, more lavish holidays and so on.
            Many of us seem to be living way beyond our means. i wonder where we ever got the idea to do that?

      • Great point. That’s a theory that I subscribe to.

      • “just incredibly lucky to be living in a world where unprecedentedly rapid technical progress increased incomes regardless of the policy environment”

        Yeah, luck. That’s it! How about we use Occam’s Razor and cut out all the lame excuses?

        The historical reality is that the centrist Keynesian system was created in the first place after the free-market system collapsed in the Great Depression. Why did this balanced economic policy produce such incredible results while free-market ideology — which is one-sided and self-serving to businessmen — produced two global economic meltdowns?

        Clearly because the one system works and the other does not.

        Why did we experience “unprecedentedly rapid technical progress” over the past 30 years or so (electronics and computer revolution) that did absolutely nothing to increase incomes? Because of the failed policy environment: right-wing trickle-up economics…

        Macroeconomics is about developing policy that makes best use of economic resources allowing people to maximize their economic and human potential. The reason the free-market system fails to deliver is because it allows the richest people to hog up all the resources putting them to waste.

        It’s time to make macroeconomics a science. Now there are too many charlatans pushing political agendas with absolutely no accountability. If science had been carried out in this way we’d still be stuck in the Middle Ages…

        • No way. the issue is that low skill factory workers now compete with way more people, namely, the people living in Mexico, Brazil, China, India, other parts of the world. And guess what, while competition drove down the wages of some people in North America, it massively increased the wages of people in China. Furthermore, people who worked in manufacturing either went other places – where they could serve people in a more effective way. Furthermore, while the cost of some items has increased (education etc… – government fueled bubble), the cost of durable goods, food etc.. has gone down – as measured by the number of hours that the median wage earner needs to work to earn a given basket of goods.

  9. When I graduated in 1982, half the businesses on Douglas St. in Victoria were papered over and going out of business. The world was in the deepest recession since the 30′s. Later in the decade, after graduating from U of T the only work I could find was waitressing. Interest rates were in the high teens so consequently both student loans and mortgages were crushing debts. I understand that youth today have it hard, maybe even harder than we did, and I sympathize with them, but I really wish the media would stop pushing the idea that life was a cake walk 30 years ago.

    • It’s okay. To balance things, there will be a follow-up article explaining that everyone under 35 is lazy, has a large sense of entitlement, and took a lame major in school instead of going into plumbing or working in the oil patch where all the useful people work. Broadly, the media (and its attendant commentariat) never seems to tire of the stupid and pointless intergenerational bickering.

      • Very true….another generation of muttering ‘these young people today!’

        • Yup, just a little bit of history repeating…

          “…The children now love luxury; they have bad manners, contempt for authority; they show disrespect for elders and love chatter in place of exercise. Children are now tyrants, not the servants of their households. They no longer rise when elders enter the room. They contradict their parents, chatter before company, gobble up dainties at the table, cross their legs, and tyrannize their teachers…” ~ Attributed to Socrates by Plato.

      • This discussion is not about pointless inter-generational bickering. It’s not about playing the blame game. It’s just pointing out that at one time we had continuously rising living standards. Now we have continuously declining living standards.

        The real point is that centrist economic policies created an economic tide that raised all boats in the post-war era, where as the right-wing free-market reforms of the past 30 years have produced all the problems we are facing now.

        So when we look at the results, we are looking at the cause of the results. The cause is economic policy, not a particular generation of people.

    • When people talk about living standards 30 years ago, they are referring to the ones produced in the post-war era (1945-1980) using centrist Keynesian economics, compared to the past 30-year era of free-market reforms.

      In the preceding era living standards were continuously rising. Over the past three decades (that ended in a global economic meltdown we have yet to recover from) workers suffered continuous downsizing of wages and benefits (which is clearly not over yet.)

      The event you are talking about (the early 1980s recession) was actually manufactured by central banks to break the back of high inflation (the “Volcker Shock.”)

      The main point here is not to blame one generation or another. It is to point out that we can’t keep going on with the same failed right-wing economic policies that are destroying living standards. We need to returned to the balanced centrist policies we used before that produced continuously rising living standards.

      In a functioning economy, all segments of society benefit from rising wealth creation and productivity growth (meaning working less hours over time, not more.) When we have a rising tide that only lifts the yachts, clearly something is wrong…

  10. As a 47 year old, I am well aware that things are just as tough for the young adults of today as they were for me at that age. I graduated into a recession with no job prospects and was on welfare looking for a job for nearly 2 years. It was tough then. It’s tough now.

    What I tell people is that the earlier boomers (those 55 and older) have NO idea of how hard it is. While StatsCan didn’t keep records, by all accounts, they graduated into a time when job openings were plentiful. They all tell me how they all found work within 6 months of entering the work force. If that’s true for most of them, then things were considerably easier.

    • I was born in 1946….so I’m a leading edge baby-boomer. Ahead of us were smaller groups already established in careers….and there were more baby-boomers than there were jobs available. We were told we ‘had to wait’ for people at the other end to retire and ‘free up’ some jobs.

      Boomers then became hippies, and either protested in the streets or went back to school to spend more years on education. Cheap communal living became routine, and later so did drugs.

  11. Commenting just on this article only[ not had time to read the Gm article yet]

    One thing that’s missing from this argument is the rising cost of living – particularly since the recent real estate boom in N. America [ and throughout the western world]
    For instance i found it considerably easier to get by as a young man in the 80s[ my wants were much less] although that did depend on where i lived. In Edmonton – no problem; in Victoria – much harder – even did a spell on the soup line there.
    But in one sense it seems young people do have it harder. I see lots of them have to juggle 2 or 3 P/T jobs to get by. I can’t ever remember being forced to that extreme. Seems to me when the work was available it was often of the full time variety – and of course basics like rent and food were affordable in both Victoria and Edmonton. Of course my recollection of these times is from the perspective of a relatively lazy young man with no assets and few debts. Seems to me UI was far easier to access back then too.[ not that i spent much time on it] And there was always work of some kind available, particularly in Edmonton.

  12. Perhaps the labour market was as bad, but student debt, I highly doubt it.

    Just sayin,…

  13. Taxes are much lower now than in the 90s as well. Interest rates, inflation, taxes all lower than for those of us, now “over our 40s” who entered the work force between about 1977 and 1985. It’s always hard starting out.

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