Social Policy in Ontario

Rising employment number masks devastated job market

Posted on February 8, 2010 in Debates

Source: Toronto Star — Authors: Ken Lewenza

It’s predictable. The minute the new Labour Force Survey results are released to the public each month, economists and politicians fall all over themselves making grand pronouncements about the health of our job market and direction of the economy.

I could hear the champagne corks popping on Parliament Hill and Bay Street back in December when the monthly Statistics Canada jobs report card announced 79,000 jobs were created in November. BMO Capital Markets economist Jennifer Lee excitedly declared to the National Post: “Our economy is in recovery mode.”

More recent job numbers released Friday showed a growth of 43,000 in January, outpacing economist predictions 3 to 1. TD bank strategist Millan Mulraine considered these positive numbers a sign that Canada’s economic recovery has “picked up considerable speed.”

Especially now on the heels of a deep economic recession, Canadians are looking for any glimmer of hope on the jobs front. They want to put the economic devastation brought on by overzealous speculators, government complacency and a deeply flawed global financial system behind them, as fast as possible.

But I’m skeptical. These “good news” announcements just don’t fit with the constant stream of messages I receive from workers anxious to share stories about the hardships they face.

Parents tell me they can’t put enough food on the table at dinner time. Older workers say they’re exhausting their retirement savings and are at risk of slipping into poverty. Workers talk about the lack of decent full-time jobs and how quickly dignity fades when you’re struggling with unemployment.

The obsession with month-to-month job spikes could get us into a lot of trouble.

We need to dig much deeper and look at a much broader landscape if we’re going to understand what’s really going on in our economy and come up with appropriate labour market policy – from short-term stimulus to long-term changes.

We could start by looking at the full Labour Force Survey. There’s a wealth of information, some of it hard to find, and some only made available to the public for a small fee.

For example, the survey’s “R8 Tables” take a broad approach to unemployment. Some consider this Canada’s true unemployment rate. They include workers who aren’t looking for a new job because they expect recall within six months. They also count “discouraged workers,” who have given up hope of finding a new job.

These folks don’t show up in the main numbers released each month. They’re among the hidden victims of the crisis. Back in April when official unemployment was 8 per cent, the R8 numbers were coming in at an incredible 12.4 per cent.

What’s more, the main survey counts everyone with part-time jobs as “employed” – even if they were forced to take a job that provides low wages, few benefits, no pension and erratic work schedules. In fact, part-time work made up nearly all of the job growth in January.

But other survey tables reveal the extent to which Canadians are being forced to take part-time jobs involuntarily. Today, nearly 900,000 Canadians fall into this category. And the number has been rising over the past three years.

The number of part-time workers actively looking for full-time work has skyrocketed by 184 per cent since 1997.

A rise in involuntary part-time work is one clear sign that Canada’s labour market is growing increasingly precarious, a phenomenon that isn’t captured in the month-to-month figures.

The explosive growth in temporary agency and contract work is also cause for concern. In the midst of a devastating recession, temporary work actually grew by 13,200 in Canada while permanent jobs fell off a cliff.

Self-employment has also been on the rise, increasing by 80,000 from December 2008 to December 2009. Although the Harper government tries to spin this as a positive trend, many choose self-employment because they don’t have other options.

Although you likely wouldn’t know it, the Labour Force Survey is just one of many reports produced by Statistics Canada that provide us with information on jobs, and it has its own limitations: it doesn’t even look at certain aboriginal and young teen employment.

Other reliable job market reports include the company payroll-based Survey of Employment, Payrolls and Hours (SEPH). While the Labour Market Survey lumps people with more than one job together as “employed,” the SEPH report counts each position separately.

So we’ll know better if employers are upping the share of part-time jobs and whether hours are up or down.

Payroll data are not necessarily a better measure of Canada’s job performance, but a different measure. And it’s important we look at the job market from many angles.

In fact, we should be taking notice of all kinds of reports. What about EI Work Sharing reports that show 180,000 Canadians still working short work weeks? What about publishing monthly EI exhaustee reports? What about various efforts to measure the quality of jobs, for example CIBC’s Employment Quality Index?

By the time many of you read this you will have already heard a slew of politicians, policy-makers, bank economists and even labour leaders commenting on the latest jobs numbers and what they mean for our economy and its future.

Let’s avoid these surface-level pronouncements and dig deeper into the labour market numbers for a more detailed picture of Canada’s job landscape.

Despite what the headlines say, a new job isn’t necessarily a good job. This is a crucial step in getting a more accurate reading of our country’s economic pulse.

< http://www.thestar.com/opinion/article/761419–rising-employment-number-masks-devastated-job-market >

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