Todayâ€™s Jobs Report: Less than Meets the Eye
After many months in which tens of thousands of jobs disappeared, the revelation that “only” 7,400 fewer Canadians were working in June may seem like good news. But this relatively small decline in total employment masks more ominous trends.
The number of self-employed Canadians hit another all-time high in June. It would be extremely difficult to explain this surge in terms of spontaneous, voluntary decisions to work for oneself. Clearly, a grim labour market is forcing many Canadians to eke out a living through self-employment.
During the same period, full-time employment fell by 47,500 and part-time employment rose by 40,100. This substitution of part-time jobs for full-time jobs is an important dimension of the labour-market decline. It leaves ample room for businesses to have existing employees work more hours if and when they decide to ramp-up production.
As a result, an initial recovery in economic output is unlikely to entail much new hiring. Unemployment is likely to keep rising, or at least remain high, even after the recession officially ends. Policymakers debating the possibility of more government stimulus should consider not only predictions about when output may recover, but also the pressing need to create jobs even after this recovery begins.
Since Canadaâ€™s labour force continues to grow, the increase in unemployment far exceeded the decrease in employment. Nearly 1.6 million Canadians are now officially unemployed, the largest number since April 1994.
In addition to reinforcing the importance of job-creation as a policy goal, this development highlights the urgency of enhancing Employment Insurance to improve the accessibility, level and duration of benefits.