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Why do we have high youth unemployment concurrent with a national labour shortage?

Job vacancies are on the rise in agriculture, transportation, manufacturing, and in jobs such as plumbing, mechanics and electricians. It's time high schools starting teaching and promoting their value: CFIB

By Ryan Mallough and Emilie Hayes

Published in the Financial Post on October 11, 2018

In addition to being blamed for the demise of various industries, from diamonds to cereal (don’t even get us started on avocado toast), young people are often featured in stories about our struggles in the job market. Over the past two decades, there has been virtually no closing the gap between the youth unemployment rate and the general unemployment rate. Too often our governments focus on the “jobs of tomorrow” when looking at the youth employment issue; from hackathons to superclusters, policy decisions are being driven by “What do we need next?” instead of “What do we need now?”

While youth struggle to find jobs, small businesses are currently going through a significant labour shortage across the country, with nearly 400,000 jobs left unfilled. It’s no surprise that small business owners say this is the top reason they can’t grow their business.

The worry around labour shortages is particularly significant in the skilled trades. Our own data shows that half of construction businesses are already concerned about the availability of labour. On top of an already bad situation, the Canadian Construction Association is predicting that Canada is due to lose nearly a quarter-million construction workers in the next decade due to retirement. The workforce coming up to replace them is less than half that number.

Governments at every level have made significant political hay of the country’s crumbling infrastructure and promised billions of dollars in upgrades from new housing projects and transit systems to bridge, road and sewer repairs.

But who will be there to build it?

And that’s just one sector of our economy. According to CFIB’s latest data, job vacancies are on the rise in agriculture, transportation, manufacturing, hospitality and such personal services as plumbing, mechanics and electricians.

Part of the problem is that these career paths aren’t promoted to high school students, or worse, they are presented as somehow being less prestigious than white collar work. The truth is, these are often well-paying, middle-class jobs and our schools do us all a disservice by overlooking them. Looking back to our own days in high school, not too long ago, students who did well academically were pushed towards getting a university degree. No one really told us that colleges are an excellent option or that you could have a meaningful, challenging career in the skilled trades.

Academic knowledge is only part of the equation. In fact, employers actually rate it last in terms of what they look for when hiring young people, far behind soft skills, such as motivation, a good attitude, communication skills, professionalism and problem solving.

It is time for our educational institutions and governments to step up.

More than half of small business owners are unsatisfied with the job high schools are doing in preparing young people for employment, and only 37 per cent have a positive view of the job universities are doing. Curriculums need to be updated to reflect the realities of the workplace, which sectors have the highest demand, and to emphasize soft skills as well as the basic skills necessary to finding employment, including interviewing, networking and writing a resume or cover letter.

To get there, the business community has to be involved in the creation and implementation of curriculums.

After all, who knows what is needed from the workforce better than employers?

Part of the problem could be solved through a greater emphasis on Work Integrated Learning (WIL) programs, where students get real on-the-job experience as part of their education. Small businesses that have participated in WIL programs are largely positive about the experience – nearly half have hired the student full time after the program was completed.

The problem is that small business participation in WIL tends to be the exception, rather than the norm, with universities pushing more students toward public sector or big business placements. Educational institutions need to do more to engage the small business community, especially in those sectors with pronounced labour shortages, to help get more young workers where they are needed and can have opportunities for growth.

We are also looking to governments to consider the costs of training when introducing new employment policies and payroll costs. New hires are already a difficult find. Pricing out young people with drastic minimum wage hikes or the upcoming CPP expansion will delay their entry into the workforce and hurt our economy in the long run. At the federal level, the government could help offset some of the cost by recommitting to their campaign promise to introduce an EI holiday for hiring youth or implementing a training tax credit that recognizes informal training, which can cost small businesses as much as $1,900 per employee.

With the Boomer generation retiring over the next decade, the labour issue is likely to get worse before it gets better. Bringing more young people into the workforce is a solution, both in the near and long term, but governments, businesses and educational institutions need to come together first.

October 11, 2018

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