Over a million Canadians have been out of work ever since COVID-19 took hold in Canada last March
Despite the strong labour recovery seen immediately after the economic reopening, more than 1.3 million Canadians have been out of work for over six months, according to a C.D. Howe Institute report.
This represented an increase of 107% in the number of jobless workers between March and September this year, “far exceeding the peak increase of 37% over the same length of time in the 2008 financial crisis,” said report writers Tammy Schirle and Mikal Skuterud. “This exceptional increase in long-term joblessness, a measure that is more inclusive than the more common measure of long-term unemployment, reflects the persistent impact of COVID-19 shutdowns, the ongoing impact of the health crisis, its impact on workers’ expectations of recall by past employers, and childcare challenges facing parents.”
Young adults, in particular, have been hit hard by the crisis, with around 40% of the long-term jobless in September belonging to the 20-35 age cohort, compared to 32% during the same time last year.
However, “there is some evidence younger workers may find it easier to recover as jobs re-open,” Schirle and Skuterud said. “Older and long-tenured workers, particularly those in manufacturing, fare substantially worse than other groups when they are laid off. Perhaps younger workers – with more years ahead of them – have greater incentives to invest in new skills as part of their recovery efforts, through education or on-the-job training.”
This upskilling needs to be quick to take advantage of this fact, though.
“Available evidence suggests that the longer workers are jobless, the less likely they are to make successful transitions back to employment – a phenomenon known as negative duration dependence,” Schirle and Skuterud said. “Part of the reason appears to be employer preference: a 2013 study examined callback rates on fictitious resumes sent to real job postings, and found that employers preferred applicants who were recently unemployed over employed applicants, but strongly discounted the resumes of applicants who had been jobless for more than six months.”
