Effects of COVID-19 job losses on Canadians under 25 could last a lifetime: economist
Posted May 10, 2020 8:22 pm.
Last Updated May 11, 2020 6:55 am.
VANCOUVER (NEWS 1130) — Canadians under 25 have been hardest hit by job losses due to COVID-19, and their employment and earning prospects are likely to suffer longer-term, according to an analysis from TD Bank.
Senior Economist James Marple says younger workers make up 30 per cent of those unemployed due to the pandemic even though they make up only 14 per cent of the population.
“We know, looking at what’s happened in the last two months it’s obviously catastrophic for every age group but particularly bad for people under 25,” he says.
The concentration of young people in certain sectors is a major factor.
“Around half of people under 25 work in service and sales sectors, sectors that require closer contact with customers, which have been all but shut down during the pandemic,” he says.
“Those have been the worst-hit industries so they’ve seen a disproportionately large negative employment shock.”
And that shock will reverberate.
“There’s really a permanent income scarring,” Marple says.
New graduates trying to start careers during an economic downturn can expect to earn 5 per cent less over their lifetimes than those who graduate during healthier economic times.
“Those first few years are so important in building your career. The unfortunate reality is that it really does set those people back,” Marple says.
He notes studies that show it takes about 10 years for people who start their careers during a recession or depression to “repair the damage to their incomes.”
Retraining, or going back to school are ways to gain a bit of an edge, but Marple notes that colleges and universities have also been affected by the pandemic.Labor_Force_Youth_Impacts