Employment losses will likely sabotage Gen Z's future purchasing power, says TD Economics
The COVID-19 pandemic is making the prospects of Canada’s youngest would-be homebuyers murkier, if the latest labour numbers are any indication.
New data from Statistics Canada showed that employment in the 15-24 age bracket fell by 22% in April, representing roughly 480,100 lost jobs.
This was almost a quarter of the total labour losses during that month alone. In a recent report, TD Economics attributed this phenomenon to Generation Z’s greater presence in the service and sales sectors, which have been among the hardest-hit by the coronavirus.
“On the other end of the spectrum, very few young people are employed in management occupations, which shed very few jobs (2%) over the past two months,” TD said. “As a result, while representing just 14% of the Canadian population, this age group has represented almost 30% of the jobs lost over the past two months.”
Coupled with mounting insolvency, the situation is painting a less-than-hopeful outcome for the nation’s future homebuyers.
“Past recession cycles have shown that young people often bear long lasting scars on their livelihood,” TD said. “This forms in more than one way. For instance, there is such a thing as ‘luck in timing’. Entering the workforce during a period of weak labour demand coincides with reduced earning potential, which can persist for a decade or more relative to those who benefited from stronger market forces at the point of their entry.”