What is Causing UnDERemployment for Workers Aged 20 40? Practical Solutions for Addressing Youth Un- and Under-Employment February 2016
The Youth UnDERemployment Committee was formed in February 2015 after Sean Casey, the Member of Parliament for Charlottetown, hosted a Town Hall examining the issue. The Committee wanted to create recommendations for all sectors that influence or are affected by, youth under- and unemployment. A special thanks goes to our committee members, who were: Alicia Altass, Haley Doherty, Travis Gordon, Martine Kelly, Beth Lassaline, Katharine MacDonald, Christina MacLeod, Ben Morrison, Kendi Tarichia, and Christy Morgan
The Facts Prince Edward Island has a significant stake in the issue of youth unemployment. The youth unemployment rate is now 2.3 times higher than the national average, the highest gap in the past 30 years, suggesting that market conditions appear to be disproportionately less favourable for young people. Table 1: % Unemployment Rates (PEI) - December 2015 (StatsCan CANSIM table 282-0002) Research from TD Economics reveals that the economic cost (i.e, wage losses) of the recent decline of youth employment has notable implications for Canada s economy, both in the short and long term. The immediate cost of wage losses due to unemployment is estimated at $10.7 billion, with long term costs (or future wage losses) over an 18-year period estimated at $12.4 billion, for a combined total of approximately $23 billion or 1.5% of GDP. Recent international skill-based surveys have shown that Canada does not compare favourably to other countries when it comes to underemployment. Results from the OECD s 2012 Adult Skills Survey revealed that 27% of Canadian workers reported to have qualifications exceeding those deemed necessary to get their job. Consequences For Youth and a Nation For youth, the consequences of underemployment may be particularly harmful as longitudinal studies of young people who faced long spells of underemployment (and unemployment) in precarious, low-wage, no-benefit jobs have shown that they struggle to catch up with older workers, and peers, and face persistently lower earnings. At the macroeconomic level, underemployment reduces GDP growth through the waste of human capital and/or reduction in productivity. 3
Federal Government Recommendations Canada Student Loans Reduce the Canada Student Loans interest rate from 8% to align with private sector loans. Reduce interest payments for education programs that match labour needs (i.e., 1% for high-demand sectors versus 5% for low-demand sectors). Implement a process to demonstrate monthly repayment amounts, and length of repayment periods, prior to applying for Canada Student Loans each year. Post-Secondary Education Support Increase investment for programs that provide on the job training. Provide funding to provinces to offer private sector signing bonuses, or program completion incentives. Provide funding to universities and towns to supplement employment on- and off-campus during school years. Job Security Building on the example of New Zealand, implement a Discovery Leave for all permanent, full time positions. After 3 years, an employee will be eligible to travel, go back to school, or take another job for either 6 or 12 months, and the employer is required to maintain that job until the employee returns. Economic Development Provide a livable income for a year for a new entrepreneur that is not tied to being EI eligible. Support research/training in leading-edge sectors and in-demand jobs. Support post-grad research programs that hire new graduates. Increase the number of work-terms or job placements to help university graduates acquire technical skills needed in the workplace. 4
Education Provincial Recommendations Integrate career preparation into education curricula. Implement a student debt or loan remission program for those who stay in Prince Edward Island, post-graduation. Bolster access to co-operative education opportunities for Island high school students in all areas. Examine the student financial aid system and ensure that no students are penalized for building their experience by working during study. The province should eliminate the requirement for youth to be EI-eligible to participate in provincial programming as long as the youth unemployment rate remains above the general unemployment rate. Integrate youth community service programs into education, to give youth a special sense of place and community on PEI. Provide effective high school guidance counseling by way of exploring all options, including: university, college, trades training, or direct entry to the labour force. Provide education on personal finance in Island high schools. Employment Examine the structure of employment support programs to ensure that the program design contributes to the best outcomes for employer and employee. The provincial public service should begin a mentorship or job placement program for young people in relevant fields, as have existed in the past, such as the Management Trainee Program. Expand the Island s creative enterprises. Music PEI estimates that the Arts contribute about $24 million to the GDP of Prince Edward Island, and sustain over 1,000 full-time jobs. A review of this sector should be conducted to identify areas of growth and potential. A strategic initiative should be developed to help guide the arts sector. Expand programming to help small local Island businesses connect with global market opportunities. Focus on PEI s export opportunities (ex. shellfish, agriculture, bio-tech). Improve services to help immigrants to enter the workforce. Create more accessible workplaces for youth with physical and intellectual disabilities. Youth Representation Establish an advisory body or representative group for youth on Prince Edward Island, recognizing the unique role Island youth have in ensuring the continued viability of the Island, in addition to the unique challenges they face. Entrepreneurial Opportunities Appoint a Minister of Business to provide an effective champion at the cabinet table, dedicated to growing the economy and job creation. Ensure the availability of the Junior Achievement program in Island high schools to promote entrepreneurial and business skills. 5
Municipal Recommendations Youth Entrepreneurship Build and foster a strong culture of youth entrepreneurship. Develop strong relationships with business leaders in the community who will offer to provide workplace mentoring and apprenticeships. Support youth-led initiatives like 21 Inc, Biz Under 40, and Fusion Charlottetown. Support and develop service hubs that foster networking and collaboration (i.e., The Spot). Create an Office of New Business A one-stop shop where individuals can learn about and access services for entrepreneurs and business development. Collaborate with various opportunities and service agencies (ie. ACOA, Innovation PEI, The Spot) to make it easier for business owners to navigate through regulations and programs. Creative Economy Expand Charlottetown s creative enterprises. Music PEI estimates that the Arts contributed about $24 million to the GDP of Prince Edward Island and created over 1,000 full-time jobs. A review of this sector should be conducted to identify areas of growth and potential. A strategic initiative should be developed to help guide the arts sector. Political Representation Increased strong political leadership from candidates aged 18 40, and the supports needed to make that happen. Increased representation on city councils, boards and action committees from community leaders aged 18 40. Promote Charlottetown Promote Charlottetown as a destination for businesses. Actively pursue larger, dynamic, growth-oriented enterprises that may not be locally owned but can create new jobs and bring wealth into Charlottetown. Take a business-friendly approach to municipal taxation and regulations. 7
Implementing and expanding cooperative programs and internships for a broader range of studies and disciplines Create co-op program opportunities for students from all faculties. Consider other existing models such as the placement year in the UK and Europe, in which students spend a year working full-time before their final year of study. Emphasize the role of Student Services and Career Services Engage students before they enroll. Advise them about course offerings, and enquire about their goals and expectations. Ensure students are fully aware of the range of advice and guidance available. Explore the possibility of integrating Career Services and preparation into the classroom. Develop career recruitment opportunities on campus, with an emphasis on long-term and year-round positions. Prepare students for transition out of university or college. Encourage capstone projects or portfolios. Provide guidance on job-seeking. Mentorship programs Develop formal programs and networks that engage alumni with current students and recent graduates. Evaluate the range of course offerings available to students Allow students more flexibility when it comes to registering for interdisciplinary courses. Provide students more opportunities to specialize by offering tailored programming. Identify programs that could be provided in condensed or accelerated formats. Reconsider the post-secondary semester model to allow youth to enter the workforce earlier Implement a financial management course, which is accessible to students from all backgrounds. Support research/training in leading-edge sectors and in-demand jobs. Support post-grad research programs that hire new graduates. Increase the number of work-terms or job placements. To help university graduates acquire technical skills needed in the workplace. 8
Employer s Factsheet CollaborentHR conducted a survey of 285 job-seekers and employees (aged 20-40) and 17 PEI employers. The results paint a picture of what youth desire and what employers need. The Youth Perspective (n=285) 36% of respondents work full-time, 18% work part-time, and 20% are unemployed. Graduates are not necessarily finding or pursuing work in their field of education or training. Of those who are employed, 36% work in their field of education, 29% have never worked in their field, and 19% have in the past, but not at the moment. Regardless of education and on-the-job training, over half of the respondents aren t doing work that they think will hold their interest in the long-term. Frustration was expressed about minimum wage, or low wages, versus cost of living in PEI. This impacts the ability to make a liveable income and earn enough to pay back student loans. Job seekers felt that employers have a tendency to set experience levels too high when advertising a position, instead of considering on-the-job training and development. 20% believed they were unqualified based on the job description, or that the salary offered was too low. The Employer Perspective (n=17) 40% of respondents have resorted to off-island recruitment at some point. Job seekers applying for specific positions don t necessarily have the experience or skills advertised by the company to fill those roles. 53% felt that job seekers have unrealistic salary expectations and/or ideas about their working hours, or the arrangement for taking time off. At the offer stage, 17% of job seekers took a better offer from another company. Over half of respondents believe that educational institutions do, or may give, unrealistic expectations of post-graduation employment options. Some employers also cited literacy and numeracy skills as an issue. 9
Programs for Employers Hire Smarter with Work Smarts The Sobey School Business Development Centre (SSBDC) provides federal wage subsidies to eligible employers throughout Atlantic Canada to hire recent graduates. From April 2015 - March 2016, the SSBDC is coordinating the Work Smarts program in partnership with Service Canada. Work Smarts provides a wage subsidy to employers to hire a recent graduate. Work Smarts provides: a $9/hr subsidy (based on a 35hr work week) for up to 30 weeks of work experience, an additional 11.51% coverage of MERC (mandatory employment related costs - CPP, EI, Vacation Pay), assistance with job posting and short listing of candidates, training and mentoring for participants to enhance their work experience, and advice and monitoring throughout the program to ensure participants and employers are receiving the best possible experience. Career Prep SkillsPEI provides financial assistance to local employers wanting to hire students before they graduate and enter the workforce full-time. Students have the opportunity to demonstrate their capabilities with the employer prior to finishing school. The goal is to match these graduating students with permanent employment opportunities in PEI. Employers must be from the private sector, but there are no restrictions on the industry sectors to be supported under the program. Eligible employers receive a 50% wage subsidy up to a maximum hourly wage of $18.00 per hour. Mandatory Employer Related Costs (EI and CPP) are provided by the employer. The position must be part-time based on a maximum of 10 hours per week. Workforce Development Fund This fund provides Island businesses with assistance to train their employees in the workplace in order to increase their skills. It includes three distinct modules for potential support, including Workforce Learning, Workforce Exposure, and the Canada-PEI Job Grant (outlined below). Priority is given to proposals that invest in new skills, improved productivity and competitiveness, as well as introduce new business practices required in a knowledge-based economy. Canada-PEI Job Grant This grant is open to private sector businesses based in PEI, or organizations acting on behalf of a group of employers. Projects must result in a new hire or a better job for an under-employed or unemployed individual. The grant is: employer-driven - the employer decides who gets training and what type of training is required; shared costs - eligible training costs are shared between SkillsPEI and the employer; employment for Islanders - participants have a new or better job at the end of the training. Employment Assistance Services Program This is an employment benefit program which is designed to provide financial support to organizations in assisting unemployed individuals prepare for, obtain, and maintain employment. Eligible organizations may include businesses, organizations, municipalities, band/tribal councils, and public health and educational institutions. Employ PEI Employ PEI is an employment benefit program which is designed to encourage employers to hire eligible individuals and provide them with an on-the-job work experience to enhance their skills and employability. Recommendations Collaborate with local post-secondary institutions Implement flexible work arrangements Use creative compensation methods Revise experience expectations 10
Youth UnDERemployment Committee Committee Members: Alicia Altass, Haley Doherty, Travis Gordon, Martine Kelly, Beth Lassaline, Katharine MacDonald, Christina MacLeod, Ben Morrison, Kendi Tarichia, Christy Morgan.
Sean Casey Member of Parliament Charlottetown Constituency Office 75 Fitzroy St., Suite 201 Charlottetown, PE C1A 1R6 Ph: 902-566-7770 Fax: 902-566-7780 Ottawa Office Room 920 Valour Building House of Commons Ottawa, ON K1A 0A6 Ph: 613-996-4714 Fax: 613-995-7685 Email: Sean.Casey@parl.gc.ca www.seancasey.ca