Hot! The reality of Harper’s Conservatives and Canada’s stagnant job growth

TheGlobeandMail.com – ROB/Economy/Economic Insight
Aug. 19, 2015.   David Parkinson

The Harper Conservatives love to portray themselves as the one federal party committed, above all other economic objectives, to creating jobs for Canadians. Indeed, in the current marathon campaign, we can expect to hear the Tories boast often about their job-creating record. Over the next few weeks, you may well hear “one million jobs since the end of the recession” and “strongest job-creation in the G7” until your ears bleed.

And why not? It plays well to the suburban, middle-class, economically aspirational voters who form the bedrock of Conservative support, and have kept Stephen Harper in the prime minister’s residence for three straight elections. Above other, arguably more debatable economic policies such as tax cuts (done and done, and done some more), balanced budgets (long promised but still not quite delivered, though now tantalizingly close) and economic growth (it has vanished at the worst possible time for a party seeking re-election), delivering jobs to hard-working people is a bottom-line pledge behind which voters of many stripes are happy to align themselves. Who wants to take a chance on environmental commitments and daycare programs, when these guys over here are promising us jobs?

The problem is, the reality hasn’t been living up to the promise. As a key plank in the Conservatives’ economic platform, job creation can’t support the weight this government has placed upon it.

Yes, it’s true that since the recession lows of June, 2009, the Canadian economy has added nearly 1.3 million jobs. And since the current version of the Conservative government was elected to a majority in May, 2011, the Canadian economy under its watch has added 772,000 jobs – a decent if unspectacular average of 15,400 a month.

But most of that – more than 500,000, in fact – came in the first two years. In the second half of their mandate, the Tories’ record for job creation has hardly lived up to the government’s “jobs and growth” mantra.

Over the past two years and change, the country has added a net 263,000 jobs – or a thin 10,000 a month. (U.S. employment, after accounting for the size difference, grew at nearly triple the Canadian pace over the same period.) In that time, Canada’s working-age population has grown by nearly 700,000; job creation hasn’t even come close to matching population growth. The modest decline in unemployment has come largely because of shrinking participation in the labour force, hardly an encouraging sign of a thriving labour market. The country’s employment rate – the percentage of working-age population with jobs – is no better than it was at the end of 2009, and has been generally declining for more than two years now.

Now let’s consider where those jobs have been created. Both in the first two years of the government’s mandate, and in the past two years, nearly one-third of all employment gains have been in Alberta – a province whose work force makes up just 13 per cent of the national total. It looks like the Harper government’s job-generating strategy has hinged disproportionately on the health of one big oil-producing province. While it’s certainly not the Conservatives’ fault that the oil patch has been hammered by depressed global prices in the past year – contributing considerably to the national slowdown in employment growth – by the same token, it can’t take much credit for the strong job growth earlier in its mandate that was heavily torqued by booming oil prices.

And it’s not just the quantity of job creation that has been lacking, but the quality. Statistics Canada’s monthly payrolls survey shows that job growth in goods-producing sectors – where average earnings are 37 per cent higher than in service-producing industries – has ground to a halt over the past two years, adding fewer that 25,000 jobs from May, 2013, to May, 2015. The vast bulk of job creation has been in the lower-paying services sector. Manufacturing jobs are down; food service jobs are up.

Of course, things could be worse. Canada’s employment hasn’t turned downward despite this year’s stagnant economy; the country has continued to add jobs, albeit slowly. The unemployment rate is near postrecession lows.

And the Tories are right, at least to a point, in arguing that the current funk in economic growth and job creation is being fuelled by international economic weaknesses beyond their control. This government didn’t drive oil prices down to multiyear lows; it didn’t slam the brakes on the Chinese economy; it isn’t behind Europe’s debt crises or the bad weather that slowed the U.S. recovery earlier in the year.

Still, on economic issues, voters have long demonstrated a mentality of “what have you done for us lately?” And lately, it’s not just that the Canadian economy has stopped growing this year and it has put the promised balanced budget in jeopardy. Bottom line is that the so-often-promised employment engine has been misfiring – and for much longer than the Conservatives are willing to admit.

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