Both employment and unemployment edged down between November and December, reflecting a smaller total labour force. This news raises concern that some jobless workers are leaving the labour force altogether. However, the labour-force decrease was only 9,000, far smaller than the previous monthly increase.
Overall employment changed so little because private-sector payrolls stabilized. While stability is welcome after the recent plunge in private-sector employment, it does not create job opportunities for the 1.6 million Canadians who are officially unemployed.
Notable monthly changes occurred in the two smaller categories of employment. Self-employment rose by 15,000 while the number of public-sector employees fell by 22,000 in December.
Both developments continue larger trends. Since October 2008, self-employment is up by 87,000 and the number of government workers is down by 23,000. Given widespread layoffs and much higher unemployment, one suspects that the ongoing surge in self-employment is mostly involuntary. Workers are struggling to generate income through self-employment since jobs are unavailable.
The drop in public-sector payrolls is striking given that the federal government and some provincial governments have increased expenditures to combat the recession. While the stimulus was largely focused on creating private-sector jobs (e.g. hiring construction workers to repair infrastructure), one might have expected more public programs to support somewhat more public-sector jobs. A possibility is that municipal governments and other public institutions are cutting costs by reducing staff.
With some signs of output beginning to recover but employment still flat, governments should be contemplating job-creation programs in preparing their upcoming budgets. One obvious starting point would be to stem the loss of jobs in the public sector itself.