If you talk to boomers these days you will inevitably find at least a few in your group or even more than a few whose adult grown children are living with them. This fact is undeniable. The reasons why are the subject of many discussions at both the Provincial and Federal level. The financial crisis of 2008/2009 has left a long dark legacy across the continent and the Canadian unemployment rate especially among the young is no secret and a very large issue that needs to be recognized and dealt with. But how? And what are the ramifications of the numbers?
The fact that so many millennials are struggling has a very direct effect that is largely un-talked about or even unrecognized. For the Bank of Canada to raise interest rates to a more realistic number the amount of unemployed youth and young adults need to rise exponentially for those rates to have a positive effect and not just knock back the gains that have been made overall. The unemployment numbers for the age demographic between 15-24 which represent the majority of the recent graduates has recently retreated to the incredibly high 55.2 from the staggering 56.1. This rate while being obviously unacceptable is also quite sobering and extremely dangerous for the economy and the country as a whole.
The absolute lack of opportunities for this demographic is direct result of the lack of investment being made by industry that is inherently afraid of the future. If the Captains of industry cannot find ways to get the ball rolling and make the capital investments necessary to expand and hire more people when access to money for exactly that purpose is at an all-time low, (rates cannot go any lower without becoming negative), then how on earth will they ever be expected to so when those same rates inevitably begin to climb and the cost of borrowing is that much higher? The direction that the economy has taken puts the Bank of Canada in a very rough spot.
You cannot raise rates because the unemployment numbers are so very high and the effect would be detrimental and you cannot lower the rates any further because of the incredibly booming housing market. The housing market is already a precarious perch and any lowering of the interest rates will turn it into an even wilder west. The fact remains that the Trudeau administration has more issues to face than it understands or at least they are more difficult than they comprehend and the jury is still out on how they react and get the kids working.
