Employment Numbers for May, 2016

A couple of day ago we got the employment numbers for the month of May 2016. The Canadian economy added 14,000 new jobs, putting the jobless rate at its lowest since July 2015 (Canada adds a surprise 14,000 jobs in May).

At first glance, this sounds like good news. When we look beyond the numbers, however, we see that there is more to them than meets the eye. For example, right now, Statistics Canada are doing their census of the Canadian population. For this reason, they have hired 35,000 people to do the job (Statistics Canada Hiring 35,000 For 2016 Census). If you look at the ads posted by Statistics Canada, most jobs start during the months of April or May (thus included in the employment numbers for those two months), and the employment period for those hired would continue through the end of July. So while we are talking about good, well-payed jobs, they are temporary. Which means we should look beyond the numbers before we rejoice at the news of some 14,000 new jobs across Canada. We must rather wait for the August job numbers, after the contracts of all those 35,000 temporary workers end.

It might surprise you that, according to Statistics Canada’s Labour Force Classification, the labour force consists not of two, but three groups of people – employed, unemployed and not in the labour force. Now this third group, the people “not in the labour force”, are very important, and here’s why: it is thanks to this group that the unemployment rate currently stands at 6.9 % . If we were to add the “not in the labour force” group to the unemployed, we unemployment rate would be significantly higher.

So who is included in this third group? According to Statistics Canada, “not in the labour force” means “persons who were neither employed nor unemployed”. Now, I believe that one can either be employed or unemployed. What other possibilities could there be? Well, you see, these are “persons who were without work and who had neither actively looked for work in the past four weeks nor had a job to start within four weeks”. (Classification of Labour Force Status) So, if you are unemployed, but have not had an interview during the last four weeks, even if you still want to find a job and start to work again – well, unfortunately, you’re no longer considered unemployed. If you had looked for a job within the past 4 weeks, but you are a full-time student looking for a full-time job – then you’re “not in the labour force” as well, even though you actually are looking for a job! Also, if you hadn’t worked within the last year, hadn’t looked for work during the past 4 weeks, and will not be starting a job within the next 4 weeks – then you’re also “not in the labour force”. So if you have been unemployed for a longer period of time, or have given up as you have no hopes of finding a job – well, you’re not unemployed. You are what they call a “discouraged worker”. And there are many others like you in Canada – a whole 10 million of “discouraged workers”! (Labour force, employment and unemployment, levels and rates, by province).

OK, now let’s exclude, for example, those between the ages of 15 and 19, as most of them (though not all) are still in school or getting a professional or college degree. According to Stats Canada, there are 2,099.4 thousands of them (which is about 2,099,400) (Statistics Canada, Population by sex and age group). So let us subtract these almost 2,100,000 people from the 10,000,000 “not in the labour force” (assuming that all of them are unemployed and have not been to an interview in four weeks, which is probably not the case – just giving them some leniency here). We’re still left with more than 7,900,000 people who are discouraged workers!

And, even if we do account for people who could be disabled, or caregivers, or stay-at-home moms, for example, we still have a whole lot of “discouraged workers” – almost 8 million of them! For a population (aged 15 and over) of 29,279,800 people, having about (with leniency) 8 million people “not in the labour force” seems quite a lot! (Out of those, 19,278,000 are considered the actual “labour force”, 17,946,000 of them are “employed”, a bit more than a million (1,331,400) – “unemployed”, and the difference is made up of those 10,001,800 “not in the labour force”.)

So, no matter how much the mainstream medias try to convince you that “everything is great”, always look beyond the numbers, and do your own research! Things usually aren’t as good as they seem.

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