Here’s my take on Canada’s jobs recovery, written for the Economy Lab.
The Economy Lab is a new on-line feature of the on-line business section of the Globe and Mail, part the newspaper’s extensive print and electronic make-over launched on October 1.
Editor Rob Gilroy has made it a lively spot. The Daily Mix is full of links to interesting readings, There are short pieces from the Globe’s stable of high-octane reporters, And they’ve started a brand new section of daily pieces from a wide array of Canadian economists.
I’ve been asked to be a regular contributor. This website will of course provide grist for the mill. But I also invite suggestions from you, dear reader, for topics you think should be brought to the attention of this diverse audience.
The full text of my Economy Lab article is below, but you should check out their site if you haven’t already.
The Harper government loves to refer to Canada’s post-recession track record with the phrase “we’re punching above our weight.”
If only it were true.
When it comes to the true measure of recovery – jobs – Canada is not punching above its weight. In fact, we’re still waiting for a meaningful private-sector-led full-time jobs recovery.
Between October, 2008, and July, 2009, the Canadian labour market lost a stunning 503,000 full-time jobs and a total of 588,000 permanent jobs. That’s worse than any rate of job loss in a nine-month period since before the Second World War.
This week’s economic and fiscal update by Finance Minister Jum Flaherty trumpeted “All of the jobs lost during the recession in Canada have now been recouped.”
Reality check: Compared to October, 2008, Canadians are still short 224,000 permanent jobs and 162,000 full-time jobs.
There are only about 60,000 more public sector jobs than two years ago, and while private sector job creation showed some momentum this past summer, that has since dissipated.
As the chart shows, the pool of private sector jobs is still down by 140,000 compared to October 2008. The types of jobs have changed too.
Canada’s job recovery has been fuelled by self-employment, temporary work (contract, seasonal and casual work), and part-time positions — three categories which, together, are called precarious employment by labour economists.
As of September 2010 almost four in 10 Canadian jobs (37.6 per cent) were precarious. These jobs are here today, gone tomorrow. They provide unpredictable income streams even when you are working – hardly the foundation for a sturdy recovery.
Today, more than half of Canada’s 1.5 million unemployed (55 per cent) can’t access jobless benefits, and many Canadians will lose their homes if they encounter a big a drop in income.
This should be a red flag for governments, which have, thus far, played a critical role in stabilizing the labour market as the private sector caved in. Now many of them are eyeing cuts and work force attrition to balance their own books.
Until the private sector recovery finds its legs and starts hiring people under less-tentative terms, governments should not cut spending, and jobs. It may actually put the books into worse shape, both public and private, since Canadians haven’t been this exposed to the economic risks of joblessness in generations.
Savings rates are at levels last seen in the late 1930s, access to jobless benefits at levels last seen in the early 1940s, and household debt just keeps breaking record after record. Six in ten Canadians say they are living from paycheque to paycheque.
We’d all like to punch above our weight, but when it comes to describing Canada’s job recovery, the analogy falls short.
- Beating Back the Ghosts: Be Gone Appeals to Reinhart and Rogoff Authority. Welcome the Triumph of Reason. (April 16th, 2013)
- Austerity through infrastructure Cuts: Budget 2013 (March 22nd, 2013)
- Dead Money (August 23rd, 2012)
- Fiscal “Crisis” In Context: Two Indicators (July 12th, 2012)
- Krugman: End This Depression Now! (May 20th, 2012)