Labour Force Exodus
Statistics Canada reported this morning that 38,000 people gave up looking for work in February. The official unemployment rate fell because these Canadians were no longer counted as being unemployed. However, this huge withdrawal from the labour force is a sign of weakness in the job market.
Nationally, 25,000 of the 38,000 who dropped out were younger than 25. The labour forces of Ontario and Alberta shrank by 41,000 and 7,000 respectively. Meanwhile, BCâ€™s labour force expanded by 10,000 and there was little change in other provinces.
In February, 15,000 fewer Canadians were paid by an employer but 12,000 more reported being self-employed. While total â€œemploymentâ€ declined only slightly as a result, the loss of paid positions is further evidence of a weak job market.
This labour force exodus comes as federal and provincial governments are finalizing their budgets. The priority should be to create jobs through public investment and ensure adequate benefits for workers unemployed through no fault of their own. The risk is that budget cutbacks will push Canada back into recession by eliminating public-sector jobs and reducing expenditures that help support private-sector jobs.