Canada job crisis: Gen Z left jobless and drifting as youth unemployment skyrockets to highest in 25 years

Economic Times

a day ago

Canadian Gen Z faces a daunting job market as unemployment hits levels unseen since the mid-1990s, excluding pandemic peaks. Graduates like Sarah, Thivian, and Ben struggle with rejections and underemployment due to rising interest rates, trade instability, and automation. Experts warn of potential wage scarring and a "lost generation" without targeted interventions and structural reforms.
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Post‑COVID whiplash : Initially, young workers rode a summer hiring surge. But as inflation rose in 2021, the Bank of Canada raised interest rates, dampening hiring.
: Initially, young workers rode a summer hiring surge. But as inflation rose in 2021, the Bank of Canada raised interest rates, dampening hiring. Population growth vs job growth : Immigration surged to fill pandemic shortages - but job creation didn't keep pace, intensifying competition.
: Immigration surged to fill pandemic shortages - but job creation didn't keep pace, intensifying competition. Automation's silent creep : Entry-level roles are increasingly lost to AI, though data remains limited.
: Entry-level roles are increasingly lost to AI, though data remains limited. US trade war anxiety: Since April 2025, tariffs and trade instability have led employers to hold off on hiring.
Historical echoes and long-term impact
Canadian Gen Z is confronting its toughest challenge in decades as they graduate into a hostile labour market. According to Statistics Canada 's Q1 2025 data, unemployment for youth aged 15-24 has reached its highest level since the mid-1990s, excluding the pandemic years. Rising interest rates after Covid-19, US President Donald Trump 's tariff war, lack of new jobs with the increasing automation and AI are resulting in higher unemployment among the younger generation of workers.'This honours student is graduating into one of the worst youth labour markets seen in decades.' That's how 23‑year‑old media graduate Sarah Chung from the University of Calgary describes her situation.Despite her strong résumé, she's 'bleak' about finding work in her field and is now considering a master's degree.Similarly, electrical engineering student Thivian Varnacumaaran, who sent out over 400 applications since December, laments how 'it is disheartening' to face continual rejection. And Ben Gooch, with a mechanical engineering degree, picks up sweeping shifts at a garden centre. 'I feel like I'm just throwing darts out at a wall and hoping to hit something.'A convergence of economic forces is creating a 'perfect storm':Tricia Williams at Future Skills Centre calls youth joblessness a 'canary in the coal mine' - an early warning of broader labour risks.This isn't the first youth crisis. In the early 1990s, youth unemployment peaked at over 17 per cent, a memory Gen Z is now reliving.Research shows that entering the workforce during a downturn can cause wage scarring: lower earnings that linger for years.Beyond numbers, the toll on mental health and optimism is real. As Ben Gooch says, 'I'm kind of waiting for life to start'. For him and others, the frustration of underemployment - when school-trained skills go unused in low-wage survival jobs - underscores the emotional and economic toll of this crisis.Economist Charles St-Arnaud warns that youth are often 'last in, first out' when cuts hit. Experts say targeted job programs, structural reforms, and stronger pathways from education to employment are urgent to avoid a "lost generation."Gen Z Canadians are enduring one of the bleakest job markets in 30 years. Their voices - Sarah's, Thivian's, Ben's - reveal a generation hanging in limbo, waiting for life to begin.