Monday, July 29, 2013

Putting Canada's Employment Rate Recovery Into Perspective

The Harper government through its rather worn out and tiresome Economic Action Plan is constantly touting Canada's employment and job creation record since the end of the Great Recession, stating that Canada's economy is a stellar performer largely because it is one of the few, lucky nations that  has recovered all of the jobs lost since 2008.  While, on the surface, things look pretty good for Canada's working population, a recent report by the OECD actually shows that things aren't quite as rosy as Steve would like to have us believe.

As background information and to put things into perspective, Canada's working-age population has increased by 1.75 million since 2008 or just under 1.5 percent annually.  What this means is that just recovering all of the jobs lost during the Great Recession is insufficient to cure Canada's employment problems, an additional 1.75 million jobs actually had to be created to break even.

A more accurate way of measuring Canada's jobs performance is to look at Canada's employment rate measured as a percentage of the working age population rather than the traditional and generally quoted unemployment rate.  Fortunately, the OECD provides this data for us and it looks like this for Canada:

2005 Employment Rate: 72.4 percent
2006 Employment Rate: 72.8 percent
2007 Employment Rate: 73.5 percent
2008 Employment Rate: 73.6 percent
2009 Employment Rate: 71.5 percent
2010 Employment Rate: 71.5 percent
2011 Employment Rate: 72.0 percent
2012 Employment Rate: 72.2 percent

In fact, Statistics Canada provides us with a much longer employment data time frame as shown on this graph:

Note that while the trend looks the same as the OECD data suggests, the actual employment numbers are different because the OECD uses a different definition of working-age population.

Between 2008 and last year, the employment rate dropped by 1.4 percentage points.  While that doesn't sound like much, it is actually quite a significant decline compared to the majority of Canada's OECD peers.

Here is a chart from the OECD showing the employment rate for all 34 OECD nations:

On average, the employment rate for all 34 nations fell by 1.4 percentage points between 2008 and 2012, the same as Canada.  Apparently, when it comes to employment growth levels, Canada's performance just average no matter what the Harper government would have us believe.

Now, let's take the data and put it in order from greatest increase in the employment rate to the greatest decrease in the employment rate, again from 2008 to 2012:

Out of all OECD nations, Canada's growth in employment comes in just below the middle of the pack in 20th place out of 34.  This puts us below Germany, Korea, Japan, Australia, France and even Italy.  Out of the 34 OECD nations, nine have managed to increase their employment rate and an additional four have either no gain or a very insignificant loss in employment.

So, the next time you read about Canada's great job performance or hear one of the bobbing heads in Ottawa talk about the success of the government's Economic Action Plan, keep this data in mind.  The only way Canada's employment market would have improved would be if, like Germany and Japan, our population growth level was near zero.


  1. Great insight! You should consider looking into Quora, I'm sure many would benefit. Cheers! -Yazan Marmash

  2. I used to follow your blog a year or two ago. Recently I was cleaning out my feedly feeds and noticed that while I was still subscribed to your blog, nothing new was posted since last September. Did you intentionally turn off your RSS feeds? Or is there some kind of technical problem that's happening on my end? I would really like to have your posts come back into my feed reader.

  3. Anonymous 5:20 pm.

    Hopefully I turned on RSS feeds for you. It's at the top on the left side. I don't know what happened to the widget!

    Thanks for pointing it out for me. If it doesn't work, let me know.


  4. Me again.

    After much fiddling, it looks like my RSS feeds is back up, working and updated. Some time back, Google changed the URL of my blog (from .com to .ca) and I wonder if that was where the RSS feeds problem occurred. I checked today by clicking on the Subscribe to on the bottom of this posting and the latest posting for August 5th came up.

    Thanks for pointing out the problem.

  5. Hi APJ,

    I am the original Anonymous poster from above.

    I am happy to report that the RSS is once again working for me, and I am able to read your very insightful posts. Thank you!