Labour Market still weak: Bank of Canada
The Bank of Canada released their January 2013 Monetary Policy Report. Â Of note, the Bank downgraded its growth expectation for 2013 to 2.0% from 2.3%, and expects the Canadian economy will not reach full potential until late 2014.
Several key points in the January MPR reinforce what progressive economists have been saying about the Canadian labour market.
Since 2010, more than 27% of part-time workers have been “involuntary part-timers”. Â That means that they are underemployed, working part-time but wanting full-time employment. Â This graph shows that there has been very little improvement on that front.
Wage increases have been moderate since the recession, and the Bank expects that this will continue to be the case through 2013.
The Bank’s latest Business Outlook Survey also indicates that there is slack in the Canadian labour market, with a historically low proportion of firms reporting labour shortages (Chart 6) or pressures on production capacity (Chart 5).
Yesterday, Statistics Canada released the latest job vacancy numbers – there were 5.0 unemployed persons in Canada for every job vacancy in October. Â This varies significantly by province, with Alberta and Saskatchewan being much lower than the national average at 1.7 unemployed persons per job vacancy, and Quebec (6.2) and Ontario (7.1) higher than the national average.
All this is to say, the evidence shows that there remains considerable slack in the Canadian labour market. If anyone in Ottawa was surprised by public backlash, anger, and fear around changes to Employment Insurance, they shouldn’t have been. Â Many parts of Canada are still suffering the effects of the recession, and see no relief on the horizon. The government’s response to continued labour market weakness has been toÂ penalize frequent claimants and restrict access to EI, a serious breach of trust for Canadians who need a helping hand in hard times.
Great post Angella though I wish somehow the numbers were going in a different direction. I have been doing a bit of research on Ontario’s economy and assessing its health. Almost every labour market number one examines shows a pattern that displays a large negative impact form the recession and a lift (or drop) into a different terrain. The noted involuntary part-timers being one. But on many different aspect it is a similar story, long term unemployed, the number of senior workers doubling, youth unemployment, manufacturing jobs, and now with a bit of a swing lower trend in public sector workers, employment in many of these aspects have been disturbed, and have not even remotely returned to pre-recession levels. That is precisely why, we need a brand new approach in Ontario- away from the Drummond austerity report. The new liberal leader could be faced with a very quite election unless they breath in a new culture of policy.
Have you ever looked at statcan poverty counts in Ontario- I was stunned at the grown in the last 10 years. yet somehow nobody talks much of it- using the lim50 method officially deemed individuals living in poverty has climbed from about 1.1 M in 2001 to almost 1.8 million last year. cansim table 202- 0804. And that is with a fairly conservative measure of poverty.
That is almost a doubling!!
However, the one measure that is pointed to for success is GDP. That is closer to recovery. But in this age of rising polarization- is it we have moved beyond recognizing that for a good part of the country the recession still is definitely in place and rotting away all that was good- austerity cannot kill the deficit beast- only growth. I am not sure why Ontario policy makers and more importantly voter have not woke up to such realities.
The truth is out there, do not let social reconstruction crews pull the carpet on us- austerity does not take long to bite- it is indeed a viper from the right and its venom is toxic.
I am just looking at doing soem pre recession post recession data for various labour market analysis. I cannot seem to get to an agreement with any proven method for doing such comparisons. I.e. what is the best method to examine these values. Is it annual averages, quarterly comparison, moving averages of another fixed time period or month end cross sectional estimates? Of course the averages would use adjusted data, but if I use yearly or 12 month totals it would make more sense to use unadjusted.
Anybody with ideas or preferences on this? It does make a difference and I just read a TD report that uses quarterly comparisons on adjusted data, and I am not liking it.
Personally I am leaning towards Annual averages for square jan- dec annual measures, and 12 month moving averages of non square annual.