Commentary,  COVID,  Young Workers

The ‘Class of COVID’ Needs Support After the Pandemic

Young people have been among the hardest-hit by the economic fall-out from the COVID-19 pandemic and resulting recession. More than one in four workers under age 30 lost their jobs when the pandemic hit. And young workers now account for two-thirds of remaining job losses. Earnings for workers entering the job market at this time will be suppressed for many years to come, perhaps for their entire working careers.

In this commentary, originally published in the Toronto Star, Centre for Future Work Director Jim Stanford describes the disproportionate losses experienced by young workers – and urges powerful measures to support their recovery after the pandemic.

By Jim Stanford

We have known from the beginning that older people are most at risk from serious illness or death from COVID-19. But young people will clearly bear the worst economic and social consequences of the pandemic and its aftermath.

Physical distancing and isolation are hardest for youth, whose developing personalities depend on social interaction and validation. Young Canadians are experiencing an epidemic of suicide, substance abuse, and eating disorders that rivals the coronavirus in ferocity; health officials have declared a youth mental health emergency. Disrupted schooling has held back educational progress at all levels, with lasting ramifications for students’ learning and future employment.

The economic consequences of the pandemic are also brutally concentrated among youth. Every recession is terrible for young workers: they are the last hired, and the first fired. But this downturn has been worse for young workers than any other in postwar history. 

26% of workers under 30 lost their jobs in the first two months of the pandemic – compared to 12% for over-30s. Pigeon-holed into part-time and temporary positions, young workers were easy to dismiss when the lockdowns hit.

But the subsequent rebound in employment has been much weaker for young workers. Over two-thirds of all remaining job losses (relative to pre-pandemic levels) are among workers under 30, even though they account for barely one-fifth of the working age population.

Youth who kept their jobs most likely worked in customer-facing roles (in retail, hospitality, and other consumer sectors) where the risk of COVID-19 infection is severe – but where basic protections (like paid sick leave) are rarely provided.

Last summer the federal government offered a spate of emergency supports to youth, including the Canada Emergency Student Benefit (CESB). It paid up to $1250 per month to incoming or returning students without summer work.

This summer the pandemic still rages – but there are no targeted benefits for young workers. The CESB was cancelled. And the previous Canada Emergency Response Benefit has been replaced by expanded Employment Insurance, which most young unemployed can’t qualify for. Many youth now face a dismal summer labour market, with no income support at all.

Sadly, the economic pain for young workers will last a long time. Labour economists have documented a problem called labour market ‘scarring’: young people who experience unemployment early in their work lives, are likely to experience cumulating losses through the rest of their careers. Their earnings trajectory never catches up to what it would have been.

The math is daunting: just deferring the start of work (and subsequent wage progression) by one year can cost a new labour market entrant $100,000 or more over their career. Without targeted supports to help young workers regroup, they’ll be suffering from this pandemic long after the rest of us are gone.

Governments are presently focused on rolling out vaccines (still not available to many young workers) and planning eventual re-opening. But an ambitious strategy to help young people rebuild their lives when this is all over is a vital prerequisite for long-term economic and social recovery. Governments need to think big, and move fast, to support young workers.

For starters, the federal government should restore the CESB program for this summer. Yes, it is already May, and some students have found work. But the benefit could still be paid retroactively, and would make a vital difference for many struggling students and their families.

Then we need other powerful measures to help young people build their careers amidst the post-COVID economic rubble. A ’youth guarantee’ program, similar to those pioneered in the Nordic countries, would provide every school graduate with a job, financial support to start a business, or funding to continue higher education. That could be supplemented by a youth community and environmental corps (perhaps building on Canada’s Katimavik program) to give youth paid experience in environmental remediation, green skills, and other community-building projects. More conventional measures to support recovery in the youth labour market should include stronger apprentice systems and much better youth job placement services.

Young people have made huge sacrifices to protect their elders from COVID. The least we can do is acknowledge the vast economic consequences they will also face, and do what we can to compensate them.

Jim Stanford is Economist and Director of the Centre for Future Work. He divides his time between Sydney, Australia and Vancouver, Canada. Jim is one of Canada’s best-known economic commentators. He served for over 20 years as Economist and Director of Policy with Unifor, Canada’s largest private-sector trade union.