Canadaâ€™s Lost Year
The US unemployment rate cracking 10% will undoubtedly garner much Canadian attention. While the absolute level of unemployment has long been higher south of the border, the October numbers were far worse north of the border.
Compared to the US, Canada has fewer than one-ninth as many employees. But employers eliminated more than one-third as many jobs here in October.
Canadian Monthly Data
Most industries cut back employment. The largest exception was transportation and warehousing.
Other pockets of employment growth were construction, education and healthcare, which supports the notion that government stimulus is currently the only job creator. However, a declining number of public-sector employees contradicts this hypothesis.
Regionally, Quebec and the maritime provinces (but not Newfoundland) all experienced employment growth. The western provinces all suffered notable employment losses. Whereas the unemployment rate rose by only 0.2% nationally, it rose by 0.4% in Alberta, 0.5% in Manitoba, 0.7% in Saskatchewan and 0.9% in British Columbia.
Thus, October accelerated the convergence among provincial unemployment rates. For example, this rate is now only 1% lower in Alberta than in Quebec and New Brunswick.
Canadian Annual Data
Canadaâ€™s labour market peaked in October 2008 before being hit by the financial meltdown. Todayâ€™s release of job numbers for October 2009 provides a full year of employment data on the economic crisis.
Statistics Canada emphasizes that total employment is down by 400,000 since October 2008, which is shocking enough. But other measures paint an even worse picture.
A sectoral breakdown implies a disproportionately large loss of relatively good jobs. More than half of the employment decline, 218,000, was in manufacturing. Construction and other goods-producing industries eliminated a further 112,000 jobs. The entire service sector shrank by 70,000.
Male-dominated industries have been hardest hit in what some have dubbed a he-cession. Over the past year, employment actually increased by 2,000 among Canadian women over 25. Conversely, it decreased by 177,000 among men over 25 and by 225,000 among workers under 25.
Unemployment is up by 436,000, reflecting not only the decrease in employment, but also 36,000 more people in the labour force. This labour-force growth was less than one-tenth of population growth (389,000), suggesting that many potential workers were pushed out of the workforce altogether or were unable to enter it.
Self-employment surged by 104,000 over the past year. Unless the economic crisis coincided with a spontaneous outburst of entrepreneurship, the implication is that many workers turned to self-employment because paid positions were unavailable.
Since the Labour Force Survey counts this reported increase in self-employment toward total employment, the decrease in paid employment was much larger than the decrease in total employment. Indeed, since October 2008, Canadian employers have eliminated more than half a million paid positions (503,500, to be precise).
Not surprisingly, private-sector employers were responsible for the lionâ€™s share of this reduction: 449,000. Perhaps more surprisingly, public-sector employers cut a further 55,000 jobs.
October 2008 may be a poor base of comparison for public employment because it includes workers employed temporarily to administer the last federal election. But one would have hoped that, given a year, government stimulus programs could have outweighed temporary election hiring.