Let’s hope NDP doesn’t hurt job outlook for youth

Government mustn’t hamper the job-creating private sector

When any new government takes power, temptations abound to do something different, merely to distinguish itself from the regime it replaced.

That’s understandable political behaviour, but overhaul too much on policy and you court disaster — such as sinking Alberta’s healthy jobs market, which has been the envy of much of Canada.

Consider young adults. The new government recently hinted that young Albertans need help. One of its ideas is to jack up the minimum wage by almost 50 per cent over three years — this when the cost of living might only rise by two per cent annually.

What province has been the best for young adults in recent years? Hands down, it’s been Alberta. And we know this, in part, from interprovincial migration patterns. Those have been a signal as to where young adults spotted economic opportunity. For example, between mid-2003 to mid-2013, Alberta gained 60,855 people in the 25-34 age group, followed by British Columbia (10,643) and Saskatchewan (581).

During that same period, every other province bled young adults on a net basis, including Quebec (-24,355) and Ontario (-27,451).

What explains this westward migration? Private-sector business investment, which creates the jobs young adults seek.

From 2003-13, of the almost $1.9 trillion in private-sector business investment in all 10 provinces (excluding residential investment), Alberta attracted $654 billion — or 35 per cent. The next largest destination for private investment: Ontario at $458 billion, or 24 per cent.

As a result of all that investment, how did the young adult do on the jobs front?

The 10-year average annual unemployment rate (2004-13) for the young career class was significantly higher in Quebec (7.3 per cent) and Ontario (7.1 per cent) when compared with Alberta (4.2 per cent) and Saskatchewan (4.8 per cent). And remember, Alberta had the highest in-migration of any province. In other words, those who moved to Alberta found jobs.

Moreover, in Alberta during the same 10-year period, the average annual unemployment rate among 25-34 year olds who never completed high school was 9.6 per cent, compared to Ontario (17 per cent) and Quebec (17. 2 per cent). The national average was 15.8 per cent. For those who completed high school, Alberta’s rate (5.5 per cent) was again the lowest in the country, and far below the national average (8.7 per cent).

Among those with a post-secondary diploma, same story. Alberta (3.8 per cent) besting the national annual average (6.3 per cent).

And finally, among university graduates, Alberta was edged out by Saskatchewan, which had the lowest average annual unemployment rate (3.3 per cent) among the 25-34 cohort, followed by Alberta (3.4 per cent) and Manitoba (3.5 per cent). Here again, though, recall how Alberta, B.C. and Saskatchewan netted additional career-age young adults, while other provinces saw them flock westward.

At this point, someone usually argues that Alberta, B.C. and Saskatchewan have been lucky to have oil, gas and potash — in-demand commodities. But that’s simplistic: The presence of resource wealth is no guarantee of prosperity.

If that were true, Venezuela and Argentina would both have Western Canada’s prosperity. But they don’t, in part because of poor, anti-market, anti-prosperity policy — that, and inattention to the basics of good governance, such as independent courts, property rights, the rule of law and other foundational elements for prosperity.

Here’s the point. If the new Alberta government wants to see young adults succeed in the province, it shouldn’t get in the way of the jobcreation machine by damaging the possibility for private investment to flourish. Mark Milke is a senior fellow with the Fraser Institute and author of Go West Young Adults: The 10-Year Western Boom in Investment, Jobs and Incomes.

What province has been the best for young adults in recent years? Hands down, it’s been Alberta.