Pandemic-related carnage in the B.C. job market is hitting young workers the hardest

Statistics Canada recently reported that B.C. lost a stunning 130,000 jobs in a single month (March). While the global economic downturn, the shuttering of much of the domestic consumer-facing economy, and the virtual cessation of air travel have affected workers of all ages, younger people in the early stages of their careers have been especially hard hit.

The breakdown of job losses in March is depicted in Figure 1. As shown in the left side panel, losses are fairly evenly divided across the three broad age cohorts. Employment for both the 15-24 age cohort and the core working age group (25-54) tumbled by roughly 50,000 in March. The number of jobs in the 55 and over category dropped by 30,000.

But proportionally, the impact is much greater for younger workers. The 25 to 54 age cohort covers a 30-year period and represents 4.5 times as many jobs as the 15-24 cohort (covering a 10-year period). In percentage terms, employment in the youngest cohort collapsed by 15% in March. The core working age group experienced a 3.2% drop, still significant but a fraction of what young workers are experiencing.

Figure 1

It’s not surprising younger workers have been disproportionately impacted. They occupy a larger share of jobs in sectors of the economy that have been shuttered – food services, bars, theaters and entertainment as well as other segments of the retail industry that are closed. Younger workers also account for a larger share of part-time employment and have less seniority in most workplaces.

The magnitude of the job market setback for teenagers and young adults is worrisome. Figures 2, 3 and 4 show the number of jobs for each of the three age cohorts each month going back to 2002. The dashed red lines in each figure provide a visual reference for how far employment has fallen and how many years of job growth have evaporated. In sum, employment for the core working-age group and the 55 and over group declined by an amount equivalent to two to three years of job growth. In comparison, for the 15-24 cohort, all job growth recorded since the 2008-09 Great Recession and then some has been erased in a few weeks. For younger workers, employment has fallen back to levels last seen 17 years ago.

Figure 2

Figure 3

Figure 4

Jobs will return as current restrictions are loosened. But the re-opening of shuttered businesses and non-profit organizations will be measured and staged. And when reopening does occur for restaurants, bars and some retail outlets, service and capacity may be reduced, translating into fewer jobs than in the pre-pandemic period.

There are several reasons to be concerned about employment prospects for younger workers:

• This group will see more job losses in the coming weeks. When labour market data is reported for April, we expect the number of jobs in the 15-24 years age cohort will fall to levels last seen perhaps two and a half decades ago;
• The experience of younger people in the last recession is also concerning. Jobs for those aged 15-24 were very slow to rebound after the Great Recession – employment remained flat for five of six years, and it took a full decade for this age cohort to regain its pre-recession level of employment. While we are confident there will be some revival of employment as the economy reopens, it may take many years to regain pre-pandemic employment levels;
• Job prospects for people 15-24 years of age were already deteriorating before the global pandemic. As shown above, employment for this age group was trending lower prior to February 2020.

The longer young people are unemployed or out of the labour market, the greater the “scarring” and the long-term damage they suffer as skills atrophy and they become more detached from the labour market. Getting as many people – including young adults – back to work as soon possible or in new jobs quickly must be a priority for policy-makers. Achieving this goal will require a concerted government effort to support new and growing businesses and to identify and reduce barriers to job creation and business expansion.