Tuesday, November 19, 2013

Canada's Unbalanced Employment Gains

We keep hearing from the Harper government about the great success that it has had at taking the helm of the Canadian economy, resulting in the creation of untold numbers of jobs that have kept Canadians ahead of the rest of the world in this post-Great Recession world.  While, as shown here, there is no doubt that the unemployment rate has dropped:

...one has to wonder what types of jobs have been created and whether or not all sectors of the economy have created jobs.

A recent study by the Conference Board of Canada suggests that, while the jobs lost during the Great Recession have been replaced, job creation has not been even across all sectors of the economy.  In fact, as shown on this bar graph, two sectors out of sixteen have been responsible for 45 percent or nearly 460,000 jobs in the period between July 2009 and September 2013:

It's not terribly surprising that the health care and social assistance sectors of the economy have been responsible for creating nearly one-quarter of the new jobs since the end of the last recession.  People still get ill with no regard for the strength of the economy and, with Canada's aging population, the demand for health care workers will only continue to rise.  In the year since October 2012, the health care sector has added 78,000 jobs, an increase of 7.2 percent on a year-over-year basis.  In the case of the construction sector, it was particularly hard hit during the recession as both housing and commercial construction dropped.  Here is a graph showing the drop in housing starts during early 2009 and how quickly the rate picked up in the last half of the same year:

In large part, the construction sector benefitted from the enhanced infrastructure spending by the federal government (think of those ubiquitous Economic Action Plan signs that we have all paid for).

On the other side of the ledger, there are three sectors out of the sixteen that have still not seen full recovery in employment levels; 

1.) manufacturing.

2.) public administration.

3.) other services which includes personal and laundry services as well has private household services which includes gardening and housekeeping.

What is interesting is the still elevated number of unemployed Canadians compared to the pre-recession level as shown here:

Prior to the Great Recession, between 1.0 and 1.1 million Canadians were unemployed.  This rose to a peak of 1.6 million during the depths of the recession, an increase of between 50 and 60 percent.  Since then, the number has dropped to 1.325 million meaning that there are still between 225,000 and 325,000 more unemployed Canadians now than there were prior to the Great Recession.

Just in case you wondered, here is a bar graph showing what has happened to the average weekly earnings of several sectors of the economy on a year-over-year basis from August 2012 to August 2013:

Year-over-year weekly earnings growth in the two biggest employment growth sectors as noted above were as follows:

1.) health care and social assistance: up 1.9 percent to $827.00.

2.) construction: up 4.7 percent to $1203.00.

This compares to an all sector average annual increase of a measly 1.3 percent.

As you can see from this data, the employment recovery in Canada since mid-2009 has been unbalanced.  Two main sectors have been responsible for the lion's share of the job gains with three sectors still waiting to return to pre-Great Recession job levels.  While Mr. Harper and Mr. Flaherty tout the "Canada Advantage", keep in mind that there are hundreds of thousands of Canadians that are still experiencing the negative economic aftermath of the 2008 - 2009 economic contraction no matter what all of those lovely, taxpayer-funded, partisan posters and billboards may say.   Unless, of course, you happen to work in either health care or construction.

1 comment:

  1. Seems like the worst condition of unemployment has been improving. Government and private sectors are responsible for this issue.

    Sanola Jerry