Still in Recession
I contribute occasionally to a web based publication, The Mark.Â Today they are running my piece on the continuing crisis in the job market, and the need for governments to respond.
The first few paras follow:
“While the situation is not quite as daunting as in the U.S., Canadaâ€™s job market is still mired in deep recession. Chances are that it will take a long time to climb out of the hole into which we have fallen, unless governments give job creation the priority it deserves in the upcoming round of budgets.
Economic growth has resumed, but the consensus of private sector economists recently canvassed by the Department of Finance is that the national unemployment rate will average 8.5 per cent this year, and fall only slowly next year.
Our economy has to grow at an annual rate of at least 2 per cent to put a dent in unemployment. This is because the labour force is growing by 1 per cent per year as echo baby boomers still enter the job market in large numbers, and because labour productivity â€“ output per hour of work â€“ usually rises by at least 1 per cent per year.
If we are to stop the unemployment rate from rising, the economy has to generate about 350,000 jobs per year. On top of that, if we want to return to the unemployment rate we had before the Great Recession began in October 2008, we have to create about 500,000 new jobs â€“ and that would still leave over 1 million Canadians out of work.
In January, the economy added 43,000 new jobs, but they were all part time. The national unemployment rate stood at 8.3 per cent, a bit down from the recession high, but the â€œrealâ€ unemployment rate is much higher.
A Statistics Canada measure adds to the number of unemployed those people who have dropped out of the labour force because no jobs are available, and the lost hours of people who want to work full-time but can find only part-time jobs. The unemployment rate by this measure is still over 12 per cent, or one in eight workers.
A significant proportion of the lay-offs that occurred during the recession and even before, especially in manufacturing and forestry, are permanent. We face a severe social and poverty crisis as tens of thousands of workers who are unemployed through no fault of their own exhaust their Employment Insurance benefits, and find that few if any jobs are available in hard-hit communities across the country.”