How bad are things in Canada’s job market? Bank of Canada Governor Stephen Poloz says bad enough for young people to consider working for free.Of course I'm not exactly sure how it's lost on Poloz, who is Canada's central banker and one of the people directly responsible for the low interest policy (along with Mark Carnage) that has put speculative ever-rising housing costs as one of the primary drivers of Canada's domestic consumption economy, that perhaps alongside wages that haven't budged in 30 years and certainly haven't kept up with real price inflation that the other primary reason these people are still living at home with their parents is they can't afford to move out because excessive low interest rates have now made housing in Canada nearly the most expensive in the world.
Adult children stuck in their parents’ basements because they can’t find adequate employment should take unpaid work to bolster résumés as they wait for the recovery to take hold, Poloz said Monday in Toronto.
Canadians are struggling with steep housing costs, according to a large global survey which found that high mortgage, rent and utility payments are leaving little for saving and investing.
The global investor pulse survey, released Thursday by money manager BlackRock Inc., found that “many Canadians feel that they are in a financial squeeze – hard pressed to save amid what they perceive as a high cost of living, including devoting much of their income to paying for their homes.”Somehow I highly doubt that even finding "adequate employment" is going to result in an "adequate paycheque" that even comes close to matching the highly speculative and rising cost of housing, or that will protect these people from the losses when (not if) this massive bubble in housing we mistakenly call a "recovery" finally collapses like it should of in 2008. Canada may not have been as over-leveraged as the U.S. back then but we sure as hell are now and the consumer trends currently at play simply don't signal that it has any support beyond continued low interest rates and immense foreign investment.
On top of driving up the cost of assets the low-interest rate policy (being set by the man warning about low interest rate policies and their effects) also has the nice little side-effect of ensuring this generation he claims to be oh-so-concerned about never gets any returns on their savings. As the entire purpose behind stimulus is admittedly "to drive savers into riskier assets and get capital flowing" of course that's assuming you have any capital to flow in the first place though now isn't it? Most of those reasonably well off today accumulated that wealth not by trading on the market, or investing in companies, but by putting a little bit of cash away in a savings account which returned enough in interest to either meet or exceed inflation. The current generations of "adult children" as Poloz likes to call them is being robbed of this opportunity in the name of ensuring those who have already accumulated the wealth believe they still have it (by transferring what little wealth those younger have into their hands).
For those not well off enough to benefit from the new "income splitting tax credit" (which oddly seems only to help families which mirror that of Stephen Harper's) Canada has another solution for you, it's called the food bank, and plenty of Canadians are already taking advantage of it!
Food Bank Canada report: Number of Canadians in need of help 'alarmingly' highSo don't worry, "adult children", you can live with your folks rent free (I'm sure they won't mind) and if you need to eat? Well there is always the food bank. What's important is that you take some unpaid work and get your resume up to speed until "the recovery takes hold" (and I'm guessing you'll have to wait until employers stop complaining about how much labour costs in Canada and they stop pushing for TFWs as well too).
Food bank use in Canada increased slightly this year in comparison to 2013, and it remains significantly higher than it was before the economic recession, according to a report released Tuesday by Food Bank Canada.
In the month of March 2014, more than 840,000 people received food bank assistance, one per cent higher than the same snapshot period last year. More than a third of them were children, and nearly half of households helped were families with children.
Of course I'm struggling to see how generation(s) that can't afford anything and isn't to be paid for their contributions in employment is going to help drive an economy that's based entirely on over-leveraged consumption and help it "recover". This is what it looks like when an unsustainable Ponzi-conomy reaches the end of the road: something has got to (and will) give, it's only a matter of time, and it's not going to be pretty when it happens.
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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.
Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.