Young workers face tough job market, but AI is not necessarily to blame, report finds

A recent study from Statistics Canada suggests that while it may be more difficult for youth to land a job, artificial intelligence is not necessarily to blame.

The study published last week said it found “no broad evidence” that the rise of AI has led to substantial decreases in hiring or increases in job separation rates – which account for voluntary and involuntary ending of employment – in Canada since November, 2022, when ChatGPT publicly launched.

It also noted this was the case for younger workers and people in jobs it classified as potentially more susceptible to AI substitution, like data-entry clerks or computer coding-intensive occupations.

“AI is no doubt reshaping sort of workflows and redefining jobs right now. I have no doubt about that,” said Tahsin Mehdi, a senior research economist at the agency and study co-author. “It’s just, it may not be eliminating entire jobs right now.”

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Statistics Canada noted hiring and job separation rates, which account for layoffs, from the six months before November, 2022, to the six months ahead of August, 2026, were “generally within historical ranges or represented a continuation of pre-existing trends.”

The study examined data from labour force surveys for workers aged 15 to 64 in Canada between January, 2006, and August, 2026, and classified jobs based on potential exposure to and complementarity with AI, which measured how the technology affects different jobs and if AI is a tool that can enhance a worker’s output or be a substitute for human tasks.

Mehdi said hiring and job separation rates were used because they can offer “early signals of shifts in the labour market” whether due to trade dynamics, economic factors, tech disruptions or AI.

Youth job market

He said data showed a decline in hiring for young workers across industries, including jobs generally seen as less impacted by AI.

“It’s hard to sort of differentiate (or) sort of tease out, well, if it’s happening across the economy, then how can we really say that AI is definitely impacting certain jobs?” Mehdi said.

For example, the study noted that in jobs with low exposure to AI, the hiring rate for employees aged 15 to 29 decreased from 4 per cent in the six months before November, 202,2 to 3.3 per cent in the six months before August, 2026. Meanwhile, over that same period, youth hiring rates in jobs more vulnerable to AI substitution edged down from 3.2 per cent to 3 per cent.

“We have a lot of competing economic forces out there,” Mehdi said. “AI is another layer of complexity, but we have trade dynamics, U.S. tariffs, we have immigration shocks over the past couple of years, the rapid growth in population, which had an impact on the labour. It’s sort of hard to tease out how AI fits into all that when we have so many things going on.”

The study also indicated hiring rates in coding-intensive jobs decreased from 2.5 per cent to 1.9 per cent in the 2022 to 2026 time span, but Mehdi said hiring in that field rose to above five per cent around 2020 and 2021, and firms may have over-hired during the pandemic.

“Often people sort of mischaracterize that as an AI effect, when in reality it could have been firms just simply adjusting their workforce,” he said.

Employment growth for younger workers was relatively weak – regardless of potential exposure to AI – in the post-pandemic period, according to the research.

“After the pandemic, the labour market did shift in a substantial way, and some groups of the population, such as youth, they might be still sort of feeling the reverberations and aftershocks from the pandemic,” Mehdi said.

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Detecting AI’s impact

Still, the study lands amid ongoing fear over AI’s possible impact on jobs. Last week, The Associated Press reported Microsoft was offering voluntary buyouts to 60,000 employees in Canada, India, the United Kingdom and the United States as the company spends heavily on AI.

Viet Vu, the manager of economic research at The Dais, a think tank at Toronto Metropolitan University, said he’s not surprised by Statistics Canada’s findings and it’s part of a growing body of evidence – including in his own research – that shows “you just can’t detect AI’s impact on the Canadian labour market just yet.”

Vu suggested fear over AI can arise from the fact that it has the potential to impact every sector of the economy and is changing at a pace faster than our labour market is accustomed to.

But he suggested a greater fear among young people comes from the notion that AI can “change the fundamental social contract of work.”

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Most people go to school, gain experience in their respective field and use that to land a first job, which leads to future jobs until retirement, Vu explained.

“If any of these middle steps disappear, such as the step in which you’re getting your first job, where you no longer have the opportunity to translate what you learned in school, to leverage that into a career, then that spells a lot of trouble,” he said.

Dispelling fear around AI

Studies like this one can “help dispel some of that immediate fear and counter some of the existing fearmongering” around AI’s impact on the work force, Vu said, but it doesn’t address the unease people may have about the future.

“But these kinds of studies are really the only way for us to actually understand if those future scary worlds may actually come to be, and if it does come to be, for us be able to respond appropriately,” he said.

The study’s authors noted the insights represented early findings.

“As AI adoption accelerates, it will be essential to continue monitoring labour market trends to better understand how technological changes are reshaping the economy – and for whom,” the study said.