Canada’s Private Sector Stumbles

My take on today’s grisly Labour Force Survey follows:

Private-Sector Meltdown

Canada’s private sector eliminated 95,000 jobs in July. In other words, nearly 1% of Canadian private-sector jobs disappeared in a single month. The creation of 30,000 public-sector jobs and 11,000 self-employed positions offset less than half of this loss.

Although manufacturing accounts for below a fifth of private-sector employment, it accounted for more than a third of private-sector job losses in July. Manufacturing eliminated 32,000 jobs that month. Since November 2002, a total of 375,000 manufacturing jobs have disappeared.

Ontario Hit Particularly Hard

Ontario accounted for most of Canada’s private-sector job losses, all of Canada’s public-sector and self-employment gains, and all of Canada’s manufacturing job losses. Ontario’s private sector eliminated 76,000 jobs in July, nearly 2% of provincial private-sector employment.

However, the province gained 34,000 public-sector jobs and 23,000 self-employed positions. One must ask whether Ontarians are becoming self-employment voluntarily or due to the disappearance of jobs paid by private-sector employers.

Ontario manufacturers eliminated 41,000 jobs in July. Since November 2002, the province has lost a total of 235,000 manufacturing positions.

The long-anticipated Ramsey Report on “Manufacturing in Ontario” was posted on the provincial government’s website without fanfare a week ago. Indeed, the Government of Ontario did not even issue a press release upon receipt of this document. Today’s Labour Force Survey underscores the need for more government engagement and open debate on the future of manufacturing in Ontario.

Unemployment and Discouraged Workers

The unemployment rate increased among adult men (from 5.3% to 5.4%) and adult women (from 4.6% to 4.8%). The overall unemployment rate declined because 54,000 young workers (ages 15 to 24), as well as 19,000 adult men and 1,000 adult women, dropped out of the workforce. In other words, the demographic groups with the highest unemployment rates (youth followed by adult men) are abandoning the labour market altogether.

UPDATE (August 9): The Toronto Star’s report quotes this post and provides Ontario political reaction.

One comment

  • To me it looks like the lay-offs and plant closings that we have been witnessing in the qualitative space has finally come home to roost in the quantitative.

    It is time we all get off our fixation that we have a tight labour market in Northern Alberta. The bias within the press and the righ leaning crowd to continue to focus on tight labour markets in a couple of postal codes in Northern Alberta is just the type of denial that the Harperites are best at.

    When are we going to see some interest rates relief. When are we going to see some innovative policy options from the tories. The high dollar, seemingly on the retreat after being pegged to the price of oil has done such damage to our economy it is pathetic. Yes we have seen declines to the south of the border, but if Harper and the rest of his circus would have had any idea on how to run an economy, we would have had some dollar relief and interest rate relief by now.

    We need fiscal stimulus not more monetary policy tightening. Bring down the rates and start up some policy programs that focus on restoring the manufacturing base. We need to get Mr. Harper away from his American pals and his free market economic textbooks.

    Focusing on quality jobs and a commitment to preserving what we can through this economic crisis would be a good start. Subsidize, deficitize, spend, decarbonize, socialize, do whatever it takes to preserve and upgrade the manufacturing base. Rather than closing plants down, we should be coming up with policy to update and modernize facilities. Subsidize, do whatever it takes to keep the investment here. Once its gone, it;s gone.

    Start with the Auto sector and those dollars will flow outward and multiply. “Auto renewal” and “auto pact” has got to become second nature to every government industry leader. Otherwise our economy will be nothing but doom and gloom and oil exports.

    paul t.

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