Ideas

September 24, 2020

Despite COVID impact, young Canadians are the least worried about economy

The Business Council of Alberta recently conducted a survey with IPSOS to gain a better understanding of Canadians’ perception of the current state of the economy along with their top priorities for Canada following COVID-19.

What was interesting—and unexpected—about the survey results was that young adults, considered to be the hardest hit economically, are also the least worried.

This commentary takes a look at the paradox between survey responses and the lived experience of young Canadians in the midst of COVID-19. It offers some possible explanations for this apparent paradox, discusses possible drivers, and explores some implications for public policy.  

Quick Share
Despite being among the most impacted by #COVID19, nearly 40% of young Canadians believe the economy is doing okay. This commentary explores why this might be happening and what that means for policy. Click To Tweet

How do young adults view the current economic state?

Canadians aged 18-34 have a much rosier view of current economic conditions compared to older age groups. Survey respondents were asked: in terms of current economic conditions in Canada as a whole, how would you rate the overall state of the economy right now? Interestingly, 39% of people in this age group rated the economy as either “very good” or “somewhat good.” That’s nearly 4 in 10 young Canadians. This response share was noticeably higher than the 27% of respondents age 35-54, and significantly higher than the 18% of those age 55+ who rated the current economy as very or somewhat good.

Breaking the data down further, about 9% of the 18-34 age group rated the current economic state as “very good” compared with just 2% of the 35-54 age group, and a number too low to report for the 55+ group. In other words, a large share of young adults see the current economic state as pretty A-okay, and some even think it’s great.

READ MORE: New poll shows economic concerns are top for Canadians in COVID recovery

What do young adults see as top priorities for Canada?

This wide difference in perspective on Canada’s economic health impacted respondents’ views on what the country’s top priorities should be. Respondents were asked what they thought were the most important issues facing Canada today. They were able to provide up to three open-ended responses.

Younger Canadians were much less likely to cite economic recovery or the COVID-19 response as key priorities compared to older Canadians. In fact, only 11% of young adults listed the COVID-19 response as a top priority and only 18% listed economic recovery, compared with 25% and 31% respectively for the 55+ group.

What do younger adults see as a priority instead? They are not too sure. With the exception of “social safety measures to reopen work and schools” which younger Canadians were more likely to cite as a top priority, they were less likely to list any specific priority and were significantly more likely to state that they didn’t know what Canada’s main priority should be. In fact, with 36% reporting they didn’t know, they were about twice as likely as the 35-54 group and three times as likely as the oldest cohort to state “don’t know”. Meanwhile, older adults were not only more likely to list a priority, but they were also more likely to list multiple priorities. Basically, the average number of responses increased with age.

Why do young adults see things more positively?

To some, it might seem incomprehensible that individuals would view the current economic state as good or even great, and to not be able to name at least one major priority area for Canada moving forward.

So why do such a large share of younger Canadians view the economy as somewhere between good and great? And why did such a large share of younger Canadians not list economic recovery or the COVID-19 response, or anything at all, as a key priority area? 

Less Impact?

One possibility is that they have simply not been impacted as much as older adults. Based on labour market data, however, the opposite seems to be true. For example, according to unemployment statistics, young Canadians age 15-24 were much more likely to have lost their job due to COVID-19 and are still much more likely to be out of the workforce. The unemployment rate for individuals aged 15-24 sits at an all-time high of 23% as of August—which is more than double the pre-COVID-19 average—compared with an unemployment rate of about 8% for Canadians age 25-54 and 9% for Canadians 55 and over.

One caveat with the data from Statistics Canada is that the “young adults” age group is younger than the one in our survey (15-24 versus 18-34). But data from a different survey via IPSOS corroborates this point for the same age group: it found that one in five individuals age 18-34 lost their job and noted this age group is “bearing most of the burden” from the COVID-19 shutdown and related recession.

What’s particularly concerning is that the impact is expected to be especially stark for individuals within this age group who are at a pivotal stage in life—they’ve recently graduated from high school or post-secondary and are just beginning their career, or are about to do so. For instance, a survey by Statistics Canada of Canadians age 20-24 found that over one-third (35%) of participants had a work placement cancelled or delayed as the result of COVID-19.

Although some may not realize it yet, the impact of these missed opportunities may transcend a lackluster extra couple of months with mom or dad. A recent study by economists in collaboration with Statistics Canada revealed that people who have the misfortune of graduating during an economic crisis can experience much longer-term losses than they might expect.

Based on the current labour market, graduates are expected to lose between 8% and 15% of their cumulative earnings over the next five years if employment among young adults doesn’t improve soon. Drawing on data from recent recessions, these researchers also found that losses are expected to be even more pronounced for women and, as a percent of earnings, have a disproportionate impact on those with less education.

Sufficient income support?

Another possibility is that young adults have not fully felt the financial impact of the economic shutdown thanks to swift and expansive federal financial support like the CERB program, in addition to other programs designed more specifically for students such as the CESB. Some in this group may also be further cushioned from the full financial impact of a job loss if they are currently living with and/or financially supported by a parent. It is even possible that some young adults who would otherwise have been working part-time ended up receiving more money from CERB or CESB than they would have through their job.

Perhaps this feature of our emergency income supports, combined with greater optimism found among young people about their future and the future of their country more generally, means that many in this group view the current economic state as a temporary hiccup which has not had a significant financial impact on them or their peers.

Lack of awareness or reluctance to share?

A final driver could simply be a lack of awareness. Younger individuals may not be as aware of situations beyond their personal reality as older adults because they are less interested in the news and less likely to trust what they read, view, or hear. This would also help to explain why this group is so likely to state “don’t know” with regard to Canada’s top priorities.

The high “don’t know” response could also be due to less willingness to share political opinions. This could stem from the lower average level of education and/or income among younger respondents versus older cohorts. For instance, individuals who have not graduated high school were the most likely to say they didn’t know what Canada’s priorities should be (43% of respondents in this group).

Studies of surveys have consistently found more “don’t know” responses among individuals with lower education. A recent paper from the London School of Economics, however, argues that willingness to state political opinions has less to do with education alone and more to do with income. According to the findings, lower-income individuals are less likely to feel competent or entitled enough to offer their political opinion. Given the general correlation between income and age, this could also be an underlying factor.

Whatever the reasoning, our survey suggests that young people do not seem to think that their current situation is as dire as their job losses and expected earnings losses would suggest. This is important for policy makers to know as policy measures shift from emergency support to economic recovery. Our survey suggests younger Canadians who are most vulnerable are unlikely to advocate for themselves, but that doesn’t mean they aren’t an essential consideration for a strong future for Canada.

join the movement

Sign up to stay updated on our work and join the movement toward a better Alberta for all.

 

Ⓒ Copyright Business Council of Alberta | Privacy Policy

Pin It on Pinterest