More Canadians Give Up Looking for Work

Canada’s labour market stagnated again in June. Employment edged up by only 7,000 as the working-age population grew by 30,000.

In response to this job shortage, 17,000 Canadians dropped out of the labour force. Canada’s economy is not generating nearly enough jobs to keep pace with the number of available workers.

The good news is that employers replaced 22,000 part-time positions with 29,000 full-time positions. So, those who have jobs are being paid for more hours.

Several recent Statistics Canada releases have shown austerity squeezing the public sector. Today’s numbers appear to buck that trend, with significant growth in public employment led by healthcare and education. Meanwhile, a sharp drop in agricultural employment and declines in most other goods-producing industries drove down the private sector.

UPDATE (July 7): Interviewed on last night’s Lang & O’Leary Exchange and quoted on page B1 of today’s Toronto Star, Regina Leader-Post and Saskatoon StarPhoenix

UPDATE (July 16): I have the following letter in today’s Leader-Post:

Jobs concern justified

In “NDP off-base on job stats complaints” (July 10), Murray Mandryk seemed puzzled by my observation that Saskatchewan’s construction industry faltered last month. Statistics Canada reported that our province lost 1,900 construction jobs in June – the largest change registered for any industry.

Service-sector expansion edged up total employment by 500 jobs, which failed to keep pace with Saskatchewan’s growing population and labour force. As a result, provincial unemployment jumped by 2,000 in June compared to May.

Mandryk argues that, if we push the base of comparison back to June of last year, the above measures look better. He has a point that one month does not make a trend.

However, construction is a cyclical industry and tighter mortgage rules could slow home building. Reduced access to mortgages and rising rents will continue to increase the need for affordable housing in Saskatchewan. More provincial investment in social housing would address this need while helping support construction employment.

We should also consider unemployment in a broader context. Statistics Canada’s last report on job vacancies revealed that Saskatchewan had three unemployed workers for every available job during the first three months of 2012, even before the recent jump in unemployment.

By comparison, Alberta had only two jobless workers per vacancy. Our goal should be full employment: no more unemployed workers than job vacancies.

New Democrats are correct to raise the issue of higher unemployment in Saskatchewan. Discussion should focus on finding policy solutions rather than attempting to deny the problem.

– Erin Weir is an economist with the United Steelworkers.