The latest labour force report from Statistics Canada paints a picture that’s nearly identical to July, with August experiencing minimal job growth and rising unemployment. With an increase of just 22,000 jobs in August and the unemployment rate climbing to 6.6%, the job market is continuing its downward trend. This is now the highest unemployment rate we’ve seen outside the pandemic years since May 2017. It’s evident that while there’s mild movement in the job market, population growth is outpacing job creation, and that’s putting pressure on workers — especially those at the margins.
Over the past several months, we’ve also been tracking the youth unemployment trend, which has only further intensified. August’s data shows even more downward movement, suggesting long-term consequences for businesses and workers alike. Employers must be proactive and recognize these shifts as opportunities to adapt.
Examining the Employment Numbers
On paper, the addition of 22,000 jobs in August seems like progress, but the reality is more complex. The entirety of that job growth came from part-time work (+66,000), while full-time jobs dropped (-44,000). This shift in job types, combined with rapid population growth, pushed the unemployment rate another 0.2 percentage points to 6.6%. As Brendon Bernard highlights in his analysis for Indeed, population growth (+96,000) yet again outpaced job creation, contributing to ongoing challenges in the labour market. Despite the increase in the workforce, the hiring rate remains sluggish, making it tougher for job seekers.
Looking closer at the sectors — education, healthcare, and finance all saw positive growth which aligns with the increase in population. However, sectors like professional, scientific, and technical services lost ground. Jobs are increasingly shifting away from full-time and higher-skilled and higher paying roles, raising questions about the quality of available work and the future of the Canadian economy.
A report from TD Economics further reinforced this view, noting that despite gains, the overall employment picture remains tepid. Bernard also points out that weak hiring rates, particularly in the private sector, have driven the higher unemployment figures, while layoffs remain low, suggesting possible job security for those already employed. This creates a paradox where those on the margins of the labour force — like youth and recent immigrants — are feeling the brunt of the slowdown, while those with established positions are less affected but reluctant to move.
Despite this cooling, wage growth remained strong, with hourly wages up by 5% year-over-year in August. Wage gains for youth, however, are particularly notable given their rising unemployment, reinforcing the need for businesses to rethink how they attract and retain younger workers.
A Tough Summer for Students
Students faced a difficult job market this summer, with unemployment rates climbing to 16.7%, the highest since 2012 (excluding the pandemic). In an interview with Global News, Bernard points to two major factors contributing to this — the cooling economy and a large influx of younger job seekers. The overall slowdown in hiring due to economic factors, such as high borrowing costs and reduced consumer spending, means there are fewer available jobs. Additionally, while youth employment has technically grown by 25,000 jobs, the youth labour force itself has expanded by over 100,000 people. This influx of job seekers has heightened competition, leaving many young people struggling to secure employment. These difficulties can lead to long-term consequences for their career trajectories, a phenomenon known as “labour market scarring.”
Statistics Canada also highlights that this summer was particularly challenging for students from racialized communities, especially Black, Chinese, and South Asian students. Their unemployment rates soared to 29.5%, 22.4%, and 21.5% respectively. This trend is alarming, since the numbers show that the youth job market is not only struggling but becoming increasingly inequitable as well.
The bottom line is that younger workers are facing increasing challenges securing employment. For businesses, this is an opportunity to attract younger workers who are eager for stable employment. Investing in internships, entry-level positions, and training programs can help bridge the gap between student workers and long-term career paths.
Growing Wage Gap for Recent Immigrants
While wages have grown overall, the story is starkly different for recent immigrants. According to the August data, wages for immigrants who have been in Canada for less than five years remain largely unchanged, sitting at $30.59 — almost $5 lower than the average Canadian-born employee wage of $35.83. More concerning, is that more than one-third of recent immigrants fall within the lowest wage quartile, compared to only a quarter of their Canadian-born counterparts.
These wage disparities are exacerbated by perceptions of unfair pay. Many recent immigrants also feel they aren’t being compensated fairly for their work — only 57.3% believe they’re paid appropriately, compared to 64% of their Canadian-born counterparts.
This wage gap presents a challenge not just for immigrant workers, but also for businesses aiming to build an equitable workplace. Employers can take steps to close this gap by offering fair compensation, providing career development opportunities, and ensuring inclusive hiring practices that both prioritizes equity and taps into a highly motivated talent pool that’s ready to contribute — benefiting both the workers and the business as a whole.
Moving Forward
As we head into the fall, it’s clear that Canada’s labour market isn’t out of the woods yet. Wage growth may be holding up, but the increasing employment struggles among youth and immigrants underscore the need for proactive solutions. The challenge for businesses now is to not just weather this period but to find ways to grow within it.
“It’s crucial for businesses to stay agile and respond to these evolving labour market conditions,” says Craig Brown, CEO of Agilus. “Attracting and retaining talent will require more inclusive practices, support for emerging workers such as professional development and internal mobility and ensuring employees feel valued and aligned with their employer’s corporate culture. At Agilus, we’re here to help businesses tackle these challenges and drive better outcomes for their teams.”
Take the lead in shaping your workforce’s future. At Agilus, we offer tailored recruitment strategies that empower businesses to achieve their goals. With nearly five decades of experience and a nationwide network of engaged candidates, we offer customized solutions that help businesses thrive. Ready to experience the impact of a total talent solutions partner? Let’s get to work!
