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Philip Cross: Why is youth unemployment so high? Government policies
Young people have borne the brunt of the recent deterioration in Canada's labour market. Youth unemployment usually runs at about twice the rate for adults, reflecting young workers' lower productivity and inexperience at searching for a job. But now it's nearly three times the rate for adults, which puts it at 'crisis levels' according to some commentators. The likely cause of this crisis? Government programs that have raised the minimum wage and sharply increased the supply of low-skilled foreign workers. The unemployment rate for those between 15 and 24 years of age shot up 5.4 percentage points from its recent low of 9.2 per cent in March 2023 to 14.6 per cent in July 2025. Over the same period unemployment for those 25 years and older rose just 1.3 points, from just 4.4 per cent to 5.7 per cent. The rise in their unemployment does not fully convey the deterioration of labour market conditions for young people, however. Disappearing job opportunities discouraged many from even looking for a job, which means they aren't counted as either in the labour force or unemployed. Moreover, in July a majority of those who did have jobs were in part-time, not full-time work, only the second month that's ever happened outside the 2020 COVID pandemic. Among those 15- to 24-year-olds, teenagers have been the biggest losers in the labour market lately. Their unemployment rate has nearly doubled over the past two years, from 11.9 per cent to 20.0 per cent, a level more typical of Europe's sclerotic labour market rather than North America's usually dynamic one. And, again, many teens have simply dropped out of the labour market, resulting in their participation rate falling from 52.0 to 46.5 per cent. Young people aged 20 to 24 have fared better, with the increase in their unemployment at about three percentage points over the past two years. And their labour force participation rate has remained stable near 78.0 per cent. Why has the labour market for youths, and especially teenagers, deteriorated so badly in recent years? Government policies that raised minimum wages while at the same time allowing a flood of low-skilled foreign workers into the country. Driven by the misguided slogan of providing a 'living wage,' most governments in Canada have raised the minimum wage to at least $15 an hour, double what it was in 2005 and with growth twice the rate of inflation. Many economists, including me in a 2021 paper published by the Fraser Institute, warned that such increases would be devastating for youths, and especially teenagers. Higher minimum wages support increased incomes for only the very small number of adults who are paid it — and if you are 40 years old and still earning the minimum wage, you should probably spend time reflecting on your career choice, your skill set or your motivation. Even as higher wages were pricing young people out of the job market, a surge in the number of low-skilled workers entering Canada meant supply was rising to take their place. Ottawa relaxed the rules governing low-skilled, temporary immigrant workers in 2023, triggering a flood of two million entrants since then. Recognizing it opened the floodgates too wide, the government last fall cut the number to be let in this year and next. And last week it announced it was reviewing its 2024 initiative to allow these temporary foreign workers an easier path to permanent residency. The combined impact of higher minimum wages and a rising supply of low-skilled immigrants has crippled job opportunities for youths, especially teens. When compelled to pay a minimum of $15 an hour or more, employers usually prefer hiring a highly-motivated and more mature immigrant worker over an inexperienced youth with no résumé. Philip Cross: Trump's conspiracy theory about 'rigged' U.S. jobs data doesn't add up Philip Cross: Buckley showed conservatism needs a moral foundation The sudden worsening of labour market outcomes for young people compounds their frustration at being shut out of Canada's prohibitively expensive housing market. It should not have surprised anyone that young Canadians, hoping to remedy the damage caused by government policies, were increasingly open to voting for Pierre Poilievre's Conservative party at the past election. Philip Cross is a senior fellow at the Macdonald-Laurier Institute. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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Factbox-How Fed Chair Powell has used Jackson Hole to signal what's next
(Reuters) -One last time since President Donald Trump nominated him to lead the U.S. central bank in late 2017, Federal Reserve Chair Jerome Powell on Friday will walk through the Jackson Lake Lodge's expansive lobby, past the taxidermied grizzly bear, and into a ballroom lighted with elk-antler chandeliers to deliver a speech at the global central bankers' influential symposium in Wyoming. In his seven previous Jackson Hole speeches, Powell has touched on a range of issues, from esoteric economic concepts and monetary policy history lessons to pledges of policy support through the COVID-19 pandemic and the central bank's determination to win the inflation war that followed. Each speech, too, has included some measure of preview for the Fed's next interest rate moves, and that above all else is why Powell will have the world's attention at 10 a.m. EDT (1400 GMT) on Friday. Here is what he has previously said, and what happened next: 2018: STARS AND RATE HIKES AHEAD Powell's first - and longest - Jackson Hole speech set out his approach to policymaking, focused on "navigating by the stars" - the economics world's shorthand for concepts like the natural rate of unemployment and neutral interest rate. He did, though, offer a view on what was coming down the pike. What Powell said: "Let me conclude by returning to the matter of navigating between the two risks I identified - moving too fast and needlessly shortening the expansion, versus moving too slowly and risking a destabilizing overheating. ... I see the current path of gradually raising interest rates as the FOMC's approach to taking seriously both of these risks." What the Fed did: Following the two quarter-percentage-point rate hikes in the first half of the year, the central bank's policy-setting Federal Open Market Committee delivered two more quarter-percentage-point hikes before the end of the year. 2019: TRUMP TARIFFS 1.0 AND RATE CUTS Part history lesson and part dissection of the trade policy moves in Trump's first term in the White House that were starting to blur the outlook, Powell's 2019 speech was met within hours by the U.S. president asking on social media "who is our bigger enemy" - Powell or Chinese leader Xi Jinping? What Powell said: "We have been monitoring three factors that are weighing on this favorable outlook: slowing global growth, trade policy uncertainty, and muted inflation. ... we will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2% objective." What the Fed did: It followed a quarter-percentage-point rate cut that July with two more such reductions in borrowing costs in September and October, far less than what Trump had demanded. Then the pandemic arrived, and everything changed. 2020: 'INCLUSIVE' EMPLOYMENT, AVERAGE 2% INFLATION Delivered remotely because of the pandemic, Powell's speech in 2020 laid out a new approach to policy that placed greater weight on defending the Fed's employment mandate. What Powell said: "Our revised statement emphasizes that maximum employment is a broad-based and inclusive goal. ... Employment can run at or above real-time estimates of its maximum level without causing concern, unless accompanied by signs of unwanted increases in inflation or the emergence of other risks that could impede the attainment of our goals. ... Following periods when inflation has been running below 2%, appropriate monetary policy will likely aim to achieve inflation moderately above 2% for some time." What the Fed did: In September it adopted a new three-part test, seen at the time as an outgrowth of the new framework, for raising interest rates: the attainment of maximum employment and 2% inflation, and indications that inflation will "moderately exceed 2% for some time." The promise helped support the economy's recovery from the pandemic shock, but the stringent hurdle for restarting rate hikes was later blamed for slowing the Fed's response to inflation the following year. 2021: NO RATE HIKES NEEDED FOR NOW In a second straight virtual appearance, Powell dismissed signs of the coming inflation wave as "transitory" - a word he has come to regret ever uttering. What Powell said: "Current high inflation readings are likely to prove transitory ... If a central bank tightens policy in response to factors that turn out to be temporary, the main policy effects are likely to arrive after the need has passed ... Today, with substantial slack remaining in the labor market and the pandemic continuing, such a mistake could be particularly harmful." What the Fed did: It began slowing its asset purchases in November and held the policy rate steady at the near-zero level until March 2022. Critics at the time, and most Fed policymakers since, have said the assessment of inflation as "transitory" was a mistake that delayed the start of the rate hikes needed to fight inflation. 2022: RATE HIKES, AND PAIN, AHEAD Mincing no words in his shortest Jackson Hole speech, Powell made clear the Fed's intent to bring inflation to heel, no matter the pain it might cause. What Powell said: "While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. ... At some point, as the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases. Restoring price stability will likely require maintaining a restrictive policy stance for some time." What the Fed did: It delivered two more 75-basis-point rate increases to follow the two it had done in the meetings before Powell's speech, and then increased the policy rate in smaller increments until it reached the 5.25%-5.50% range in July 2023. 2023: RATE HIKES STILL POSSIBLE In remarks that were less stern than those delivered the previous year, Powell held out the possibility of more rate hikes while acknowledging the signs of progress in reining in inflation. What Powell said: "We will proceed carefully as we decide whether to tighten further or, instead, to hold the policy rate constant and await further data. Restoring price stability is essential to achieving both sides of our dual mandate. ... We will keep at it until the job is done." What the Fed did: It held the policy rate in the 5.25%-5.50% range, set just weeks before Powell's speech, for a little over a year. 2024: RATE CUTS COMING SOON Risks had now shifted from inflation to employment, and Powell sent a clear signal that rate cuts were coming. What Powell said: "My confidence has grown that inflation is on a sustainable path back to 2%. ... We do not seek or welcome further cooling in labor market conditions. ... The time has come for policy to adjust." What the Fed did: It ended the year-long hold on the policy rate by cutting it by half of a percentage point in September 2024, and by another half a percentage point over the final two meetings of 2024. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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Americans worry democracy in danger amid gerrymandering fights, Reuters/Ipsos poll finds
By Jason Lange, Unknown f781ef79-b713-474d-aef1-1fc7112288ee and James Oliphant WASHINGTON (Reuters) -Most Americans believe that efforts to redraw U.S. House of Representatives districts to maximize partisan gains, like those under way in Texas and California, are bad for democracy, a new Reuters/Ipsos poll found. More than half of respondents -- 57% -- said they feared that American democracy itself was in danger, a view held by eight in 10 Democrats and four in 10 in President Donald Trump's Republican Party. The six-day survey of 4,446 U.S. adults, which closed on Monday, showed deep unease with the growing political divisions in Washington -- where Republicans control both chambers of Congress -- and state capitals. The poll found that 55% of respondents, including 71% of Democrats and 46% of Republicans, agreed that ongoing redistricting plans - such as those hatched by governors in Texas and California in a process known as gerrymandering - were "bad for democracy." At Trump's urging, Republican Texas Governor Greg Abbott has called a special session of the state legislature to redraw the state's congressional maps ahead of the 2026 midterm elections, aiming to help Republicans defend their 219-212 U.S. House majority. Incumbent presidents' parties typically lose House seats in midterms, which can block their legislative agendas and in Trump's first term led to two impeachment probes. California Democratic Governor Gavin Newsom, a White House hopeful in 2028, has threatened to try to redraw his state's district map in response, adding five Democratic seats to offset Republicans' expected Texas gains. The practice is not new but has gained attention because it is happening mid-decade rather than following a census. It has meant that the vast majority of House races are not competitive in general elections; in recent decades about two-thirds of them were won by more than 20 percentage points. As president, Trump has flouted democratic norms with steps including directing the U.S. Justice Department to pursue his political adversaries, pressuring the independent Federal Reserve to lower rates and seizing control of Washington, D.C.'s police force. In interviews, Texas Republicans who participated in the poll largely supported the state's potential redistricting, while Democrats described it as 'cheating' but supported the idea of Democratic states trying to respond in kind. The poll had a margin of error of about 2 percentage points when describing the views of all Americans and about 3 points for the views of Republicans and Democrats. 'SHADY BUSINESS' Amanda Kelley, 51, an insurance fraud investigator in Dallas, was the rare Republican to criticize the Texas effort. "I don't like it when either side tries to do that. I think that's shady business," Kelley said. "The optics of it happening in the middle of the term when you would draw district lines, that leaves kind of a bad taste in my mouth." Paul Wehrmann, 57, an attorney in Dallas who described himself as an independent voter, also opposed it. "It's unfair, and it sets a bad precedent," said Wehrmann, who worries it could spiral into states redrawing maps every election cycle instead of every decade. Partisan gerrymandering "is bad all around, but I think that it is fair for Democrats to try to counterbalance what Republicans are doing. "They need to stop bringing a knife to a gunfight.' Americans of both parties have long disliked elected leaders of the rival party, but the Reuters/Ipsos poll found that they also distrust regular people who align with the opposing party. Some 55% of Democrats agreed with a statement that "people who are Republican are NOT to be trusted," while 32% disagreed. Republicans were split, with 43% agreeing that Democrats were untrustworthy and 44% saying they disagreed. The poll also showed politics weighing more on people's everyday lives than in past years, particularly among Democrats. Some 27% of Democrats said last year's presidential election has negatively affected their friendships. A Reuters/Ipsos poll in April 2017, early in Trump's first term, showed a smaller share of Democrats - 18% - reported fraying friendships because of the election. Only 10% of Republicans said this month that politics weighed on their friendships, largely unchanged from 2017. Jeffrey Larson, a 64-year-old toxicologist and Republican voter in Seabrook, Texas, said he and his wife, a Democrat, agreed not to discuss politics. 'I might not agree with what the Democrats are doing, but I don't think that they're trying to specifically destroy my life or destroy America,' Larson said. Close to half of Democrats - or 46% - said their party had lost its way, compared to 19% of Republicans who said the same of their party. Sandy Ogden, 71, a tech executive from Sunnyvale, California and self-described Democrat, said she faulted her party's leaders. 'I think the Democratic Party members are united in what we believe, but the leaders are ineffective in mounting an opposition that works,' Ogden said. Analysts said that ordinary Democrats' greater mistrust of Republicans and friction with friends suggests a reluctance among Democrats to engage with Republicans that could harm the party's chances at regaining political standing. 'Democracy involves a willingness to allow people with differing views to express those views,' said Whit Ayres, a veteran Republican pollster. Michael Ceraso, a longtime Democratic operative, found the poll results frustrating. "The majority of Democrats believe our democracy is failing and nearly half of them don't want to talk to the opposition party," Ceraso said. "We have to be better."
