Tag Archives: student loans

The young and the unemployed

From the Toronto Star

With about a million British youth unemployed, ours is hardly an isolated crisis. A recent editorial in the conservative U.K. Economist says the "plight of the jobless young … invokes talk of a lost generation." It notes the well-known phenomenon that "prolonged unemployment early in people’s working lives will leave them scarred in the long term. Youngsters who have been jobless for a year or more tend to do worse in the labour market for the rest of their lives."

Joblessness among the young is a global epidemic. By recent UN calculations, young people make up about 25 per cent of the world’s working population, but they account for 40 per cent of the unemployed.

"For the young" UN Secretary-General Ban Ki-moon said earlier this month, "informal, insecure and low-wage employment is the norm, not the exception."

Julie is enrolled to start at Centennial College next month. The tuition for her course in "Community and the Justice Services" is about $6,000 a year, a bit higher than the Canadian average annual tuition of $5,000. Or a total of about $12,000 to earn her two-year diploma.

Julie’s eyes light up as she describes her career goals. The Centennial program is a pioneering one that integrates criminology with social work, training students to coordinate the services of police, the Salvation Army, spousal abuse centres and career-counselling services. "You’re not trying to fix just one aspect of an individual’s problems," Julie says. "Finally, you’re looking at the whole person."

But Julie won’t be going to Centennial this year, after all. Her job – with its low wage and number of work hours available – didn’t allow her to save the $3,000 for her first five-month semester. And the daycare fees for her 3 1/2-year-old son, Malachi, and other costs have caught up with her.

The other option is take out student loans to get a better paying job

With university or college accreditation increasingly compulsory for fulfilling careers, more young people are graduating with a mountain of debt. A debt burden of $30,000 to $40,000 is not uncommon for graduates heading into relatively low-paying vocations such as teaching, nursing, social work and urban planning.

The better-paying careers in law, on Bay Street, in specialized branches of medicine and engineering, require even heftier debt loads. Because starting salaries in those fields are so much higher, the insidious effect is to dissuade young people from vocations of choice in, say, teaching or social work. Those would trap them in debt for perhaps a decade, and require them to postpone the expense that comes with starting a family.

The prospect of a "lost generation" due to long-term unemployment is an increasing fear among social scientists.

"This is just the start of a long and downward spiral, which all too often leads to crime, homelessness, or worse," Martina Milburn, CEO of the Prince’s Trust, a British non-profit organization, said recently. "Only by stopping young people falling out of the system can we rescue this lost potential."

As the global recession set in last year, Canadian youth joblessness of 11.6 per cent of the 15- to 24-year-old labour force was a bit lower than the average for the 30 industrial nations of the Organization for Economic Cooperation and Development. But even then, job prospects for Canadian youth trailed those of the Netherlands, Japan, Denmark, Australia and South Korea, nations with more comprehensive government-subsidized training and work-placement programs.