11/06/2014 05:53 EST | Updated 01/06/2015 05:59 EST

Encouraging Youth To Engage in Unpaid Work Is a Recipe For Exploitation

Almost 400,000 young Canadians are officially unemployed. Their unemployment rate (13.5 per cent in September) is more than double the national average. True youth unemployment is much higher, if we count those who have given up looking for work (and hence disappear from the official statistics). For the lucky ones who have a job, almost half work part-time, many in precarious short-term positions. Youth participation in the labour market is historically weak, and has actually deteriorated since the economic recovery began in 2009.

In short, young Canadians face a painful and unacceptable economic reality. They are chronically the last hired, and first fired. They are the best-trained generation in Canada's history, yet their skills are going to waste. Unemployment and mounting student debt impose huge long-term costs on young people, their families, and our economy.

Our leaders should recognize this as a national emergency. Instead, we heard some trite and exasperating advice from Bank of Canada Governor Stephen Poloz. "If your parents are letting you live in the basement, you might as well go out and do something for free," he told reporters at a news conference on November 3. Unpaid work and internships are a good way to boost your resumé, he suggested, and show prospective employers you're a keener.

Poloz is arguably Canada's most powerful economic policymaker. He has the ability to significantly change the bleak outlook facing young workers. Yet in essence, he encouraged unemployed youth to resign themselves to a grim reality, and simply find themselves something else to do. Working for free may not be ideal, he suggested, but it's better than nothing. Asked to clarify his comments before a House of Commons committee the next day, Poloz stuck to his guns.

There are numerous flaws in Poloz's reasoning. First and most obvious, he is advocating a practice that in many cases is actually illegal. Canadian employment standards require that work be compensated at minimum wage levels. Regulators in several jurisdictions are finally waking up to the fact that unpaid work, unless connected to a genuine post-secondary credit program, violates the law, and are belatedly preparing a crackdown.

In addition to explicitly violating employment standards, unpaid work opens the door to all sorts of other exploitation and abuse. Moreover, the more employers are able to access free labour, the less pressure they'll feel to create paid positions. Poloz himself has acknowledged wage stagnation is undermining spending power in Canada's economy. Working for free will obviously only make that problem worse.

The Governor's assumption that young people are sitting around in their parents' basements, doing nothing much at all, is both inaccurate and offensive. Young people are engaged, determined, and active; more of them hold down jobs while going to university or college than ever before. They face a much harder time kicking off their careers than Poloz's generation did, yet they have made the most of it. Contrary to the stereotype, young people are neither privileged, nor lazy, nor coddled.

Even in the business community, enlightened employers understand that unpaid internships are no solution to youth unemployment -- and in fact create many problems that outweigh the superficial appeal of "free labour." For example, Elyse Allan, CEO of GE Canada, recently addressed the Good Jobs Summit (a gathering of over 1000 business, labour, and community representatives in Toronto). She stated strongly that internships should be paid, not unpaid. Big companies like Bell Mobility have stopped hiring unpaid interns, due to legal concerns and the risk of exploitation.

The most infuriating aspect of Poloz's statement is that he himself could do more than virtually any other Canadian to help put young people into real, paying jobs. Monetary policy is one of the most potent tools to stimulate spending power and job-creation. The Bank of Canada could do much more to create real jobs for young people (using conventional and unconventional policies regarding interest rates, monetary expansion, and exchange rates). But instead, it puts more priority on orthodox financial goals (like inflation targeting and non-interference in foreign exchange) than on full employment. Poloz is left to advise young people on how to "adjust" to this grim reality, instead of doing more to solve the underlying problem.

When there are far fewer jobs than job-seekers, there is a natural tendency for individuals to do whatever they can to personally survive. Individual actions such as preparing better resumés, developing good networks, and -- yes -- doing volunteer work, might increase one person's chance of landing a rare paid job. But those individual coping strategies hardly constitute an adequate policy response to a genuine social crisis. Poloz, and his counterparts in the federal government, need to develop and implement real solutions for youth unemployment, instead of issuing insulting platitudes to job-seekers.

This column was written by Jessica McCormick and Jerry Dias. Jessica McCormick is Chairperson of the Canadian Federation of Students. Jerry Dias is President of Unifor, Canada's largest trade union in the private sector. Their organizations co-sponsored the Good Jobs Summit in Toronto October 3-5.


Who's Seeing Biggest Wage Gains?