How have Alberta’s young adults fared?

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Appeared in the Calgary Herald

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. And I’m being “generous” on inflation estimates. The rise in Alberta’s consumer price index over the past year was just 0.7 per cent.

I’ll reserve additional thoughts on the minimum wage for another time. Here, I’ll explore this question: 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, on a net basis, between mid-2003 to mid-2013, Alberta gained 60,855 people in the 25 to 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 (and everyone else) seek.

From 2003 to 2013, 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 that young adult, career-age cohort do on the jobs front?

The 10-year average annual unemployment rate (2004 to 2013) 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 to 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 certificate or 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 as I often must point out, that’s simplistic: The presence of underground resource wealth is no guarantee of prosperity above-ground.

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 Alberta, it shouldn’t get in the way of the job-creation machine by damaging the possibility for private investment to flourish.

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