Self-Employment Masks Job Loss

Statistics Canada reported today that employers cut the number of employees by 98,000 in August, which was largely masked by 87,000 more Canadians identifying themselves as self-employed. As a result, the headline level of “employment” – which includes self-employment – was little changed.

Self-employment ranges from high-income professionals to people eking out a living doing odd jobs. However, when a large increase in self-employment coincides with a large drop in positions paid by an employer, it begs the question of whether Canadians are becoming self-employed by choice or because jobs are not available. One also wonders how many survey respondents are simply more comfortable reporting themselves as self-employed rather than unemployed.

The headline numbers are weak and they would be disastrous but for the surge in self-reported self-employment. Policymakers must focus on creating jobs and ensuring adequate benefits for jobless workers.

4 comments

  • Bang on Erin, to me this could single the front end of some pent up change going on- or it could simply be a blip in the measurement vehicle. I think people are a bit gun shy right now, after last month. However, there is a whole lot of things one can point to for such dramatic changes in self employment- the key is the last few months and the medium term trend. After looking at the data a few things struck me- first the spike is mainly focused on the construction industry, especially trend wise. Second, it is male dominated. Third, what I noticed was there was no change in the total hours worked- or much change in the trendSo these workers could be those you imply, that they are marginally attached, and are more likely to be unemployed. And last they seemed to be focused on Ontario, BC and PQ but Ontario was the largest increase. This takes into consideration the seasonal nature of the data.

  • We’ve been trying to fake a recovery for over 5 years with lowest-in-history interest rates, lowest-in-history lending policies, and a mountain of talking heads constantly telling us we’re in a recovery.

    We never were in a recovery, and now the consequences from all our short term patch jobs are coming to bear, along with the unpaid bills from 2008.

  • Seems to me that the Statistics dept. is a bit self-serving. The sheer number of employees, about 100,000 of them, now find themselves “self-employed” which is proof that there is some sort of dramatic shift to actually being unemployed but somehow still counted as being “employed.”

  • When a person is unemployed, employment statistics are 100% to that person.

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