Sunday, August 9, 2009

Canadian Unemployment Worse Than Statistics Reveal

Though numbers show that the jobless rate is astounding, we have to remember that not all of those out of work are included in the figures. Those who haven't sought employment in the past month don't get counted.

Some have opted to simply live off their severance to wait and see if prospects improve. Others have chosen to accept part-time work or are doing odd jobs in an attempt to stay afloat.

However, all of these people are victims of this recession. The recession that Stephen Harper and his financial wizard, Jim Flaherty, said would not come.

There's jobless, and officially jobless
When Statscan issues its jobs data today, it won't tally those who have given up or postponed their searches
Tavia Grant
Globe and Mail
August 07, 2009

After John Peck was reorganized out of his job at Shell Canada Ltd. in April, he searched for work in communications or consulting for a few months. But few positions were open and the rare ones posted were swamped with applicants.

So, he has stopped looking. The 56-year-old, who received a severance package, is spending a month on Deer Island, N.B., where he's diving, sailing boats and combing beaches.

"It's a good time to wait and see what's happening with the economy, see how things shake out," he explains. "There's a lot more competition right now, and that was part of my decision to take a good chunk of the summer off."

When Statistics Canada reports its monthly job count today, many unemployed people like Mr. Peck - who have either postponed or given up their
job search - won't be tallied. That's because people who haven't hunted for jobs in the past month aren't counted as unemployed or as part of the labour force.

The gap between the actual
unemployment rate and the official statistics is likely to widen in the coming months, as more people give up their job search to go back to school, or wait until jobs are more abundant, economists say. Many more workers will settle for part-time jobs, even though they want full-time positions.

"Official numbers always understate how bad it is during recessionary periods," said Robert Fairholm, an economist at the Centre for Spatial Economics, a research firm in Milton, Ont. "Things will get worse before they get better for unemployed people."

In a forecast this week, he predicted that Canada's unemployment rate would rise to 10.5 per cent by the first quarter of 2011 if discouraged workers were counted.

Today's Statscan report is expected to show about 15,000 jobs were lost last month (it actually ended up triple), sending the national unemployment rate to 8.8 per cent from 8.6 per cent, according to economists polled by Bloomberg. The economy shed almost half a million full-time jobs - 454,000 positions - between October and June, Statscan figures show.

When involuntary part-time workers are factored into the equation, Canada's unemployment rate would have been 11.3 per cent in June, according to Statscan's so-called R8 series on "underutilized" labour, which is not seasonally adjusted. That's well above the 8.1-per-cent level it showed in the same month last year, though down from the 12.4 per cent it reached in March.

Canada's official unemployment rate is a more accurate depiction of reality than the U.S. measure, though, because it includes people who are both actively and passively looking for work, said Millan Mulraine, economics strategist at TD Securities. The U.S. criteria are more stringent - they stipulate that people have to be actively looking for work - and thus fewer people are counted in the jobless tally, he said.

Employment insurance is another indicator of joblessness; the most recent report showed a record number of Canadians are receiving jobless benefits. That, too, could be skewed in the months ahead as EI benefits run out.

Rick Newton, 46, is one of thousands of Canadians who have fallen out of the country's official bookkeeping. EI benefits for the information-technology specialist dried up last year. So the Burlington, Ont., resident put his job search on hold to go back to school to update his certifications. (my son recently received his permanent layoff notice after 17 years with the same firm. He thinks he may go back to school, so he won't be tallied despite the fact that the company he worked for has closed)

He said it was a "conscious decision" to leave the labour market after a fruitless job search. "I hope to be looking for work again in November."
A numbers game

Employment insurance is one indicator of joblessness. But that data could be skewed in coming months as EI benefits run out.

Number of people receiving regular Employment Insurance benefits
May 2009: 778,700

Unemployment rate, 8.6%

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