Rising youth unemployment could lead to lost generation: Senator Mohamed
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Canada is facing a troubling paradox: employers across the country report persistent labour shortages, yet young people — those who should be stepping into the workforce — are increasingly finding the doors to meaningful work closed.
The statistics are alarming, but not new. Nearly a year ago, Deloitte, in partnership with The King’s Trust, released Failure to Launch, a report highlighting the staggering economic and social costs of youth unemployment in Canada. At the time, the youth unemployment rate stood at a decade-high 14.5% (August 2024), with more than 850,000 young people not in jobs, school or training.
The consequences were stark. If unaddressed, the report warned, this crisis could cost Canada $18.5 billion in lost GDP and more than $5.3 billion in lost government revenue by 2034. One year later, things have worsened. As of July, youth unemployment rose to 14.6%, and the youth employment rate — the share of young people working — fell to 53.6%, its lowest level since 1998. Among those aged 15 to 29, one in 10 are now “NEET”: not in employment, education or training.
Let’s not forget that cold, hard statistics mask real-life stories: graduates unable to land their first job; racialized youth confronting systemic barriers; rural youth facing limited opportunities; and a growing number who have stopped looking for work, demoralized by hundreds of unanswered job applications.
What led us here? Several forces have converged. First, economic uncertainty — driven by global volatility, high interest rates and inflation — is making employers cautious and less willing to take risks on first-time jobseekers.
Second, automation and AI are transforming or eliminating many entry-level roles in retail, administration and service sectors — longtime gateways into the workforce for young Canadians. As these opportunities shrink, employers expect candidates to “hit the ground running,” yet many young people haven’t had the chance to build work habits and skills through part-time or summer employment. This is even more acute for Indigenous, Black and other racialized youth, who continue to face disproportionately higher jobless rates, compounded by systemic discrimination.
This is more than a short-term labour issue. Decades of research confirm that early joblessness leaves scars — lower lifetime earnings, weaker workforce attachment and poorer mental health. For a country with an aging population and growing demand for skilled workers, we can’t afford to leave so much potential untapped.
There are also serious social consequences. Persistent underemployment strains families, breeds frustration, deepens inequality and erodes trust in institutions. In a country that prides itself on fairness and opportunity, the idea of a “lost generation” should be unthinkable.
What can we do? This crisis is solvable but requires deliberate, co-ordinated action.
We must restore the critical stepping stones that help youth gain confidence and skills — summer jobs, paid co-ops, apprenticeships and meaningful volunteer opportunities.
Schools, colleges and employers must equip youth not only with technical know-how but also with soft skills — like adaptability, teamwork and problem-solving — essential for the jobs of tomorrow.
Government support is key: wage subsidies, tax credits and training supports are necessary to help small and medium-sized businesses take on young talent.
As automation accelerates, policymakers must ensure young people aren’t locked out of opportunities. This means investing in emerging sectors and shaping policy so technology complements rather than replaces entry-level work.
Youth employment strategies must be evaluated rigorously — not just by number of placements, but by long-term outcomes like retention, wage growth and career progression.
We must also apply a youth lens to policymaking — integrating youth into budgeting, program design and public reporting to drive long-term decisions. Just as Canada adopted a gender-based lens in budgeting and policy in 2018 — leading to better childcare policy and a national action plan to end gender-based violence — we must now do the same for youth.
Canada has long prided itself on being a country of opportunity. But opportunity must be more than a slogan — it must be real, visible and attainable. If young people lose faith that hard work leads to meaningful employment, we risk not just economic underperformance but a weakening of our social fabric. That is a road we cannot afford to go down.
This is a moment for leadership without partisanship. Federal and provincial governments, employers, educators and communities all have a vital role to play. With bold, co-ordinated action, we can ensure Canada’s youth are not sidelined but fully engaged in powering our shared future.
We cannot afford to wait. Every month of inaction means another cohort of young Canadians enters adulthood without the foothold they need. The cost of delay will echo for decades.
Senator Farah Mohamed represents Ontario. She is a charitable sector leader, advocate and public speaker with more than 30 years of experience in addressing systemic inequities in Canada and around the world. Before joining the Senate, she led The King’s Trust Canada, The Malala Fund, and founded FORA (formerly G(irls)20).
This article was published in iPolitics on October 21, 2025.
Canada is facing a troubling paradox: employers across the country report persistent labour shortages, yet young people — those who should be stepping into the workforce — are increasingly finding the doors to meaningful work closed.
The statistics are alarming, but not new. Nearly a year ago, Deloitte, in partnership with The King’s Trust, released Failure to Launch, a report highlighting the staggering economic and social costs of youth unemployment in Canada. At the time, the youth unemployment rate stood at a decade-high 14.5% (August 2024), with more than 850,000 young people not in jobs, school or training.
The consequences were stark. If unaddressed, the report warned, this crisis could cost Canada $18.5 billion in lost GDP and more than $5.3 billion in lost government revenue by 2034. One year later, things have worsened. As of July, youth unemployment rose to 14.6%, and the youth employment rate — the share of young people working — fell to 53.6%, its lowest level since 1998. Among those aged 15 to 29, one in 10 are now “NEET”: not in employment, education or training.
Let’s not forget that cold, hard statistics mask real-life stories: graduates unable to land their first job; racialized youth confronting systemic barriers; rural youth facing limited opportunities; and a growing number who have stopped looking for work, demoralized by hundreds of unanswered job applications.
What led us here? Several forces have converged. First, economic uncertainty — driven by global volatility, high interest rates and inflation — is making employers cautious and less willing to take risks on first-time jobseekers.
Second, automation and AI are transforming or eliminating many entry-level roles in retail, administration and service sectors — longtime gateways into the workforce for young Canadians. As these opportunities shrink, employers expect candidates to “hit the ground running,” yet many young people haven’t had the chance to build work habits and skills through part-time or summer employment. This is even more acute for Indigenous, Black and other racialized youth, who continue to face disproportionately higher jobless rates, compounded by systemic discrimination.
This is more than a short-term labour issue. Decades of research confirm that early joblessness leaves scars — lower lifetime earnings, weaker workforce attachment and poorer mental health. For a country with an aging population and growing demand for skilled workers, we can’t afford to leave so much potential untapped.
There are also serious social consequences. Persistent underemployment strains families, breeds frustration, deepens inequality and erodes trust in institutions. In a country that prides itself on fairness and opportunity, the idea of a “lost generation” should be unthinkable.
What can we do? This crisis is solvable but requires deliberate, co-ordinated action.
We must restore the critical stepping stones that help youth gain confidence and skills — summer jobs, paid co-ops, apprenticeships and meaningful volunteer opportunities.
Schools, colleges and employers must equip youth not only with technical know-how but also with soft skills — like adaptability, teamwork and problem-solving — essential for the jobs of tomorrow.
Government support is key: wage subsidies, tax credits and training supports are necessary to help small and medium-sized businesses take on young talent.
As automation accelerates, policymakers must ensure young people aren’t locked out of opportunities. This means investing in emerging sectors and shaping policy so technology complements rather than replaces entry-level work.
Youth employment strategies must be evaluated rigorously — not just by number of placements, but by long-term outcomes like retention, wage growth and career progression.
We must also apply a youth lens to policymaking — integrating youth into budgeting, program design and public reporting to drive long-term decisions. Just as Canada adopted a gender-based lens in budgeting and policy in 2018 — leading to better childcare policy and a national action plan to end gender-based violence — we must now do the same for youth.
Canada has long prided itself on being a country of opportunity. But opportunity must be more than a slogan — it must be real, visible and attainable. If young people lose faith that hard work leads to meaningful employment, we risk not just economic underperformance but a weakening of our social fabric. That is a road we cannot afford to go down.
This is a moment for leadership without partisanship. Federal and provincial governments, employers, educators and communities all have a vital role to play. With bold, co-ordinated action, we can ensure Canada’s youth are not sidelined but fully engaged in powering our shared future.
We cannot afford to wait. Every month of inaction means another cohort of young Canadians enters adulthood without the foothold they need. The cost of delay will echo for decades.
Senator Farah Mohamed represents Ontario. She is a charitable sector leader, advocate and public speaker with more than 30 years of experience in addressing systemic inequities in Canada and around the world. Before joining the Senate, she led The King’s Trust Canada, The Malala Fund, and founded FORA (formerly G(irls)20).
This article was published in iPolitics on October 21, 2025.