Canada’s labour market “has slipped into recessionary territory,” Business In Canada magazine declared this week.
An article from editor Lucas Kawa notes that Canada’s core working-age population has been growing faster than the total number of jobs in recent months.
“Taking a long-term view, 66 percent of the months in which this occurs are associated with a recession,” Kawa writes. “In a healthy economy, one would expect the rate of job creation to outstrip the growth of the core-age population.”
By Kawa’s calculations, full-time employment is up just 0.1 per cent over the past year, a fraction of the jobs Canada would have to create to keep up with population growth.
StatsCan’s latest unemployment report was just the latest in a series of disappointing reports this year, showing private-sector employment shrinking by 118,000 jobs -- the largest loss on record.
That was offset by an increase in self-employment of 87,000, but it’s unlikely that many of those who declared themselves “self-employed” are earning a stable income.
The nasty numbers don’t mean Canada is in a recession or is about to enter one -- but they do mean the country’s unemployed have limited options, not unlike in a recession. Kawa suggests Canada could be seeing a “mid-cycle slump” in job creation, as was seen in the mid-1990s when the country's economy was growing but job growth was sluggish.
Canada's employment rate -- essentially the percentage of the population with a job -- has been steadily declining for the past few years. Economists are split on whether this is due to working-age people leaving the workforce because of a lack of work, or due to aging Baby Boomers retiring. Recent data suggest both factors are at play.
This latest slump in jobs is happening at a time when the support structure for the unemployed is growing weaker. In recent years, little more than a third of Canadians who lose their jobs have qualified for Employment Insurance. In Toronto, where the unemployment rate sits at 8.9 per cent, fewer than one in five qualify.
The upside to this is that the Conservative government is expected to announce a cut to EI premiums. The Tories say this will reduce the tax burden on companies and consumers and will spur hiring.
How is the job market where you are? Do you think we are entering a “job recession”? Let us know in the comments below.
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