Over the past year, the Canadian labour force has grown by 185,000 people, but we have only added 176,600 jobs. The population grew by 1.2%, but employment only grew by 1%. The unemployment rate has not budged, at 7.3%, a far cry from the pre-recession rate of 6%.
For youth, the picture is worse, with 72,000 fewer youth employed this August compared to last year.
With lackluster private sector jobs growth, and cuts in the public sector at both federal and provincial levels, the situation seems unlikely to improve any time soon.
Corporate tax cuts have not had their desired stimulative effect, with even Governor Mark Carney pointing out the failure of the private sector to productively invest – choosing instead to hoard piles of ‘dead money’.
The OECD predicts only modest economic growth for the Canadian economy in the 3rd and 4th quarters of this year, and the Bank of Canada will likely continue to hold rates where they are. Canadian households have record levels of debt, and almost half of Canadians are living paycheck to paycheck.
So what is the way out of this economic funk?
A substantial youth employment strategy, and public sector investment on projects that improve private sector labour productivity.
Urban transit, and quality affordable childcare.
Working with employers and educators to ensure there are enough spaces to provide youth with the skills required to innovate and compete.
These are the things that our government should be working on implementing, rather than misguided austerity programs & corporate tax cuts.
- Rochon on the Bank of Canada’s Decision to Lower the Rate of Interest (January 25th, 2015)
- Banks and Balanced Budgets (January 22nd, 2015)
- Low Oil Prices, Good or Bad for Canada? (January 14th, 2015)
- Louis-Philippe Rochon’s Top 10 Economic Predictions for 2015 (January 11th, 2015)
- Bank of Canada, Exports, and LMI (October 23rd, 2014)