Generation Screwed And The Downward Spiral of Canadian Labour Unions: MMMMMMMM


University of Winnipeg in Winnipeg, Manitoba. University grads are having a difficult time keeping up with the Jonses, while Canadian labour unions are in decline

I don’t write about labour issues a lot. In fact, on this blog, I have not touched on the issue at all. However, since it’s Labour Day weekend, along within university and college students heading back to hit the books, I’d figure I would weigh in on the relationship between labour and Generation Y.

If you read today’s Winnipeg Free Press, lots of coverage was devoted to the topics of Generation Y (or Generation Screwed as they are often called), and the changing dynamics of labour relations 21st century Canada.

Mia Robson’s piece first talked about the rising debt levels, and stagnant income levels graduates face.

For example, the article points out that the average cost for a four-year university degree is $60,000! That is right folks, C$60,000. Now, to make it more insane, the average student debt for students is $27,000! That is almost the equivalent of a mortgage for a very modest house back in the 1980’s or 1990’s. I call this the mini-me of mortgages now.

Now add to this stagnated wages, as the income gap has grown between Generation Screwed and baby boomers, according to the article.

What is even more disheartening is youth unemployment is scary, as the recession hit youth workers harder than a ton of bricks. Consider this excerpt on how bad it is:

Jacques Marcil, a senior economist at TD Economics, said the economic downturn hit young Canadians the hardest. A TD Economics report earlier this year found workers between 15 and 24 were not only hurt the most by the recession, they have yet to see any recovery.

Since 2008, 250,000 jobs employing workers aged 15 to 19 have disappeared, including 70,000 since the economic recovery began.

The unemployment rate for Canadians under 25 in May 2008, before the recession hit, was 13.5. A year later, during the height of the recession, it was 17.3. In May 2012 it was 16.3.

That is more than twice the overall unemployment rate of 7.4.

“For youth, it’s always harder on the job market,” said Marcil. “They are the last in and the first out.”

Marcil said one of the issues hurting young graduates is that older workers are staying in their jobs longer.

He said the need for older people to work longer is driven by the low interest rates affecting their investments. Not only are jobs more difficult to find for graduates with specific skills, they are also hard to find for students trying to put themselves through school in the first place.

“Just think about retailers. It’s not a kid welcoming you at the door, it’s a senior,” he said. “There’s a more limited choice of jobs for youth.”

The TD report said jobs for the under 20 set have continued to disappear. While the 20 to 24 group has seem some improvement, “it hasn’t been at a break-neck pace.”

What economists are also noticing is the number of Canadians in those age groups who simply stop looking for work has increased, Marcil said.

With the increasing income gap, stagnant wages, and the upward trend in student debt, it’s no wonder this generation is becoming lost, drained and stuck in a pool of hopelessness . While some within Generation Y act like spoiled little brats at their undeserved posh jobs, I think most are having a difficult time, given the climate. Our generation just simply now will not have the living that our parents did. The only reason why maybe the living standard is artificially higher is because of cheap high-tech products coming out of emerging market countries (you know, the same jobs that were shipped out of North America and Europe because corporations are too cheap). Our parents were able to survive on often one income with four people in the household. Our parents had a high living standard, yet did not have the higher standard of education that our generation does. Take for example, this unnamed person who was interviewed in the same article:

One under-40 worker said it is frustrating that, even though he and his girlfriend have degrees and professional employment, they are still drowning in student loans and have to move back in with one of their parents in order to save enough money to buy a house.

“How is it that, for example, my father, the sole breadwinner in a family of five, who had no high school diploma, was able by my age to work and pay for a house, two cars and family expenses by my age and afford luxuries like vacations with his sole income,” the man wondered. “I keep asking myself this and finding no real satisfactory answer.”

Meanwhile, labour unions continue to face incredible downward pressure. In an op-ed in today’s Winnipeg Free Press, called Union Influence Waning (section J1;J6) executive vice-president of the Business Council of British Columbia Jock Finlayson noted that the influence of Canadian labour unions is on the decline. He pointed out only 16% of Canadians hold union membership in the private sector, sharply down from nearly one-third in back in the 1980’s.

Finlayson also expects this trend to continue in the future as shift to service/knowledge based workers, cut-throat business environment, and the increased amount of small businesses as sources of employment will play a role.

He leaves this column with these ominous words:

“This trend spells continuing trouble for unions hoping to expand their clout in the business sector.” (J6).

On the flip side, hope may not be lost for unions. Labour analyst Morna Ballantyne’s op-ed in the same section called Unions Can Regain Lost Ground (J6) said there is some hope, particularly with younger workers. She pointed to her research that 53% of Canadians under 30 where willing to sign up for a labour union card, if asked.

What even may give further hope for unions, according to Ballantyne, was this was the highest amount willing to join a union amongst all demographics was within Generation Y.

While you may scoff at Ballantyne’s research as wonderful PR for labour unions, it should get you thinking about the relationship between the increasing wage disparity between Generation Screwed and older workers. Most workers with a higher education are working in service/knowledge type jobs, where unionization rates are lower.

Perhaps maybe unions could promote employee ownership in smaller based businesses, as a solution to labour’s woes and being more pro-active towards smaller business by promoting employee ownership, rather than signing up union members. Perhaps, maybe unions could further support university/college education, through increased scholarships, and working with business and government on forming future partnerships in order to survive.

Or perhaps, unions, as nutty as it sound given my background in business, could go back and try to unionize as many private sector businesses as much as possible to raise wages in order to combat the wage disparity. Not my first solution at all. In fact, this idea ranks on the lower end of ideas to close Generation Screwed’s ever increasing income gap.

However, it could happen that will break Generation Y’s back. Perhaps some are getting sick of going to school within our generation to increase their income potential for a long period of time, with little results. Maybe, someone is going to have to pay for the baby boomer’s houses when they retire. Someone is going to have to help pay for the healthcare for our parents when they get old. Baby boomers need to care.

Rob Carrick Globe and Mail Report on Business columnist put it very nicely recently:

Looking forward to grandchildren while you’re young enough to enjoy them? It might not happen if student debts delay your kids from getting married, buying a house, banking some money and otherwise settling into the child-rearing phase of life.

And there’s the broader issue of generational compassion. A baby boom generation that shrugs off the difficulties today’s young adults might not get the empathy it expects when it reaches old age.

There is a lot more than meet’s the eye when it comes to the downward trend of Canadian labour unions and the increasing wage gap among younger workers as clearly shown here.

What do you think needs to be done, to bridge this gap?

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