Tag Archives: unemployment rate

Examining Harper’s record and spotting a fake economic recovery

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Duncan Cameron

By Duncan Cameron    August 20, 2013   http://rabble.ca

Photo: Liam Richards/University of Saskatchewan/flickr

A new report from Citizens for Public Justice (CPJ) on job creation in Canada arrived just as the Prime Minister said Monday he intends the next election to be about jobs and the economy. As part of a study of poverty, CPJ has published a set of fact sheets on job creation in Canada since the 2008 recession. It looks at regional and generational differences, assesses job quality and measures newly created jobs against new job seekers.

Anyone who believes what Conservative cabinet ministers have been repeating about job creation in Canada should read the CPJ fact sheets.

Carol Goar of the Toronto Star identified the CPJ report as explaining why many Canadians are still experiencing the recession. The Canadian employment rate is down: the number of jobs created (950,000) has not increased as fast as the population (1.8 million). Unemployment is stuck at 1.4 million. When talking about the unemployed, the government does not include discouraged workers, people with part-time jobs looking for full-time work, temporary jobs, or the under-employed. Add them to the total, and the real unemployment rate is one out of ten out of work.

CPJ explain about 500,000 jobs are needed to get Canada back to where it was before the recession. Stronger job growth where resource prices are strong (Alberta, Saskatchewan, Manitoba) and in construction mask weaker job growth in services and manufacturing.

Employment trends are weakest for Aboriginal Canadians. Young Canadians suffer disproportionately from unemployment — about one in five is without work.

Sadly, paid work increasingly means precarious jobs: part-time, low-wage and unstable. Older workers are relying more and more on temporary work.

Policy analysts divide over what to do about a lackluster economy. Some want to leave the market alone, most think governments need to lead in order for it to recover.

Conservatives believe the marketplace works fine, and any problems can be fixed by allowing prices to adjust. Unemployment is explained by the failure of rates of pay to fall, because of minimum wages, unions, employment insurance, welfare and other market imperfections, which need to be eliminated or reduced.

The problem with this view is that rates of pay are falling — policies to reduce wages have been successful, increasing inequality as Stephen Gordon has shown in Maclean’s. For the Harper government, business-funded think-tanks, and other supporters of the market view, this just means wages have not fallen enough. More of the same is just what is needed.

Those unwilling to wait for the economy to correct itself will want to know how it can be improved.

In Canada the standard strategy for an underperforming economy is a currency devaluation, accompanied by fiscal tightening. Exports incomes increase, import increases are cut off, and the private sector leads the recovery.

Floating the Canadian dollar down used to only require lowering Canadian interest rates below U.S. rates. Unfortunately, the U.S. beat Canada to the interest rate bottom, with a “zero bound” rate, introduced to revive American capitalism.

Historically low rates do prevail at the Bank of Canada. This is supposed to encourage recovery, though without bringing a currency devaluation, it is hard to see how it is going to happen.

Former Bank of Canada Deputy Governor William White called low interest rates having one foot on the accelerator. With the Harper government curbing spending, White observed, Canada has the other foot on the brake.

This contradictory policy needs to be fixed. The obvious choice is for the government to take the foot off the brake and spend borrowed money for needed public investments in urban transit, retrofitting buildings to reduce energy use, recreation, culture, the arts, advanced education, child care, and straight job creation.

The Harper government is ideologically opposed to government spending, but expect it to consider taking its foot off the brake by lowering taxes. Another reduction in the GST would inject new money into the economy, for instance. And it would also be an excuse to reduce direct spending (and reduce wages) further down the road.

The Official Opposition have their work cut out for them just to expose the poor Canadian economic record, let alone engage Conservatives in a rational debate based on economic evidence.

Stephen Harper does not expect Canadians to discover that job performance has been poor and that the economy is not improving, while the standard of living for most Canadians is declining. He has announced plans to prorogue Parliament, cutting the fall session short. This will limit the time for parliamentary debate and the subjects raised by the opposition.

If the economy is going to be the ballot question in the next election, as Stephen Harper suggests, Citizens for Public Justice have afforded parliamentarians and all Canadians with what is needed to examine his government’s record.

Duncan Cameron is the president of rabble.ca and writes a weekly column on politics and current affairs.

Photo: Liam Richards/University of Saskatchewan/flickr

Foreign workers doubled as joblessness peaked: report

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Conference Board asks why Canada is still bringing in temporary foreign workers

 

Jul 23, 2013     http://www.cbc.ca

Despite an unemployment rate that spiked in 2009 and remains high, the number of temporary foreign workers in Canada has more than doubled over the last six years, according to the Conference Board of Canada.

In 2006, there were 150,000 temporary foreign workers employed in Canada. By December 2012, that number had more than doubled to 340,000.

The growth in the number of foreign workers continued throughout the 2009 recession, when the unemployment rate peaked at 8.6 per cent. In June of this year, unemployment stood at 7.1 per cent, though joblessness among young workers was stuck around 14.1 per cent.

The temporary foreign worker program has come under scrutiny in the last four months, since CBC reported that professional IT workers were being fired from their jobs at RBC so the employer could bring in temporary foreign workers.

The federal government amended the rules in late April, making it more difficult and more expensive for companies to turn to foreign workers to fill job vacancies in Canada. But the impact of those rule changes has yet to be seen, the Conference Board says.

Its report released Tuesday says that while Canadian youth were struggling to secure employment, especially that important first job after college or university, companies continued to bring in foreign workers in record numbers.

“This, justifiably, raises the question: if the unemployment rate remains relatively high and so many young and able Canadians are unable to find work, why are we still bringing in so many people under the TFW program?” the Conference Board asks.

There is no clear answer to that question, it concludes, pointing out that Alberta faced looming labour shortages in 2006. Employers in some parts of Alberta and Saskatchewan continue to have difficulty finding workers, despite the number of jobless in Canada.

A CBC report last month found the number of foreign workers in Canada had nearly tripled over the past 10 years.

The Conference Board blames a skills mismatch and the reluctance of Canadians to move long distances to find work for the inability of employers to attract Canadian workers to jobs. There also may be perception that foreign workers can be hired for less than their Canadian counterparts, the report said.

One of the key changes that Ottawa announced in April is a new fee that will be imposed on employers when they apply to the government for a labour market opinion (LMO). A positive labour market opinion must be obtained in order for employers to bring foreign workers to Canada. It takes a number of factors into consideration including what potential benefits hiring the foreign workers would have on the labour market and what efforts were made to hire Canadian workers for the positions.

The government also got rid of a rule that allowed employers to pay foreign workers up to 15 per cent less than the prevailing wage for a classification of job.

The Conference Board said it expects these changes to put “downward pressure” on the number of foreign workers in Canada — and lead to more employers seeking out domestic workers for jobs. However, it is too soon to tell if the measures will be effective in lowering the number of temporary workers in Canada while unemployment is high, the report said.