Labour Force Participation Below Two-Thirds

This morning, Statistics Canada reported an apparently decent month of data for April, with a modest increase in employment, all full-time and all in paid positions rather than self-employment. Despite this seemingly good news, the total number of Canadians participating in the labour force edged down.

As a result, the participation rate declined to 66.5 per cent in April, matching February 2012 as the lowest participation rate recorded since April 2002. In other words, fewer than two-thirds of Canadians over the age of 15 are now employed or looking for work.

While official unemployment has remained at 1.4 million, the number of Canadians not counted as being in the labour force keeps increasing as our working-age population grows faster than employment and unemployment.

One would expect the participation rate to decline over time as more Canadians retire. However, April’s figures reflect a drop in labour-force participation among those below the age of 25 rather than long-term population ageing.