Sunday, July 11, 2010


If you were to believe the popular press these days you'd think that Canada is forging ahead economically while the rest of the developed world is falling behind. God, you'd think we were China. The reality, of course, is quite different. Perhaps it speaks to the desire for optimism. Or perhaps it speaks to the laziness of reporters who lap up government pronouncements and regurgitate them as the unvarnished truth without any need of examination. Such is the great "surge" in job creation trumpeted to the skies in the last week. the reality is quite different. pretty well all this job creation is in part time work, and the actual number of hours worked continues to decline. Here's an item from the Progressive Economics Forum about this.
More Jobs, But Fewer Hours
July 9th, 2010
This morning, Statistics Canada reported that employment jumped by an incredible 93,200 in June. But the total number of hours worked actually declined. In effect, less work was divided up between more workers. (By contrast, a similar employment jump in April corresponded to a large increase in hours worked.)

Less Unemployment: A Central Canadian Story

The advantage of dividing less work among more workers is that it reduces unemployment. However, because the number of workers seeking employment also increased, 93,200 more jobs reduced total unemployment by only 31,200.

Furthermore, this welcome decrease in unemployment was entirely concentrated in three provinces: Ontario, Quebec and Manitoba. In the other seven provinces, both the absolute number of unemployed workers and the unemployment rate increased.

The New Jobs

Employment gains were evenly split between full-time and part-time work. There are 51,900 more private-sector employees, 25,600 more self-employed people, and 15,700 more public-sector employees.

Employment declined in goods-producing industries. All of the employment gains were in the service sector, especially retail and wholesale trade, support services and healthcare and social assistance.

Wages and Inflation

Perhaps reflecting job creation in lower-paid industries, wages were soft in June. Nationally, the average wage is up 1.7% over the past year, scarcely exceeding inflation (which was 1.4% in May).

Wages were anemic in Ontario and New Brunswick, rising only 0.8%, and almost completely flat in Alberta, edging up just 0.2%. Relative to inflation, workers in these provinces have taken a pay cut over the past year.

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