It is inherently difficult to feel sorry for the guy whose signature is on the money. But the governor of the Bank of Canada, Stephen Poloz, has been receiving what must be an unfamiliar burst of catcalls for comments he made about underemployed youth on Nov. 3 and 4.
Canada, Poloz was explaining, is making a somewhat gimpy recovery from the financial bubble-burst of 2008-09. A lot of the lost employment has been superficially replaced, but an unusual quantity of the new work consists of part-time jobs being performed by people who would like full-time ones, and there are some 200,000 young people who are “out of work, underemployed, or trying to improve their job prospects by extending their education.
“I bet almost everyone in this room knows at least one family with adult children living in the basement,” he added. “I’m pretty sure these kids have not taken early retirement.”
The next day, at a hearing of the House of Commons finance committee, Scott Brison followed up, asking if Poloz anticipated a long-term “scarring” effect on young people whose entry into the labour market has coincided with a lingering recession. Poloz’s response has been summarized as: “Go work for free.” What he actually said was: “When I was asked yesterday, I suggested, as I have privately to young folks who ask me what they should be doing in this job environment, that people volunteer to do something which is at least somewhere related to their expertise, so that it’s clear they are gaining some learning experience during that period.”
In fewer words: yeah, go work for free. The remark led to a curious revival of this year’s earlier controversy over unpaid internships, particularly in the magazine industry. Poloz hadn’t technically said anything about unpaid internships, which are hardly the only means of amassing job experience by working for free, and in many cases probably not the best one. (If you want magazine work, don’t take an internship. Start a blog.) Nonetheless, there was a fresh round of recrimination for companies that faced legal and moral pressure months ago and stopped providing internships as a result.
One gets the sense that Poloz and his critics are talking past one another. The critics complained that not every underemployed young person has the luxury of living with his parents. But it is hard to see how that would contradict his personal advice to those who do have it. Everybody should make maximum use of their advantages in creating a career path. And a comfortable basement with no rent attached is one of the most widely available.
The devouring of increasing amounts of housing by the middle and working classes is one of the remarkable economic features of the past century in the developed world. As people have fewer children, they seem ever more hungry, paradoxically, for square footage. This was even one of the characteristics of the U.S. subprime-housing problem that served as the prelude, arguably the spark, for the global ﬁnancial meltdown. Lenders juiced by bad regulation were all too ready to sell ambitious Americans more house than their parents could have dreamed of needing.
In a way, it is almost as if couples have been unconsciously anticipating a world of vanishing low-skill jobs and fluid careers—preparing, in the unknowing manner of an ant or a honeybee, for their children to cling to the family home for a little longer than was once usual. We should probably learn to think of a staged separation from the folks as being quite natural. Remember, there is not only less and less work available for untrained teenagers, who are easy to replace with machines. Education is also gradually departing from the academy like a spirit leaving a corpse. You can already pick up an awful lot of useful job skills without ever leaving the basement.
“Boomerang children” are a frustration for Baby Boomers, but the world has, by and large, been wrought to suit them. Hanging around the family home and building one’s resumé is a good way to make them pay you back, certainly a friendlier one than making off with Mom’s purse. It is a little odd that Poloz’s count of basement-dwellers includes youths who are “extending their education” in the hope of presenting a better match with the labour market. These people are already doing the right thing: someone who is upgrading his human capital shouldn’t be counted as some kind of Millennial sponger, and that goes double for a sincere young person who has failed to launch in the marketplace with a useless or inappropriate credential.