Canada’s post-slump jobs record not as impressive as believed: BoC

The Canadian Press
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Canada’s official unemployment rate is among the most watched economic indicators by markets and policy-makers, but it may be overestimating the actual health of the country’s labour market, according to the Bank of Canada.

Employment Minister Jason Kenney suggested this week in the House of Commons that there are no postings listed on the federal government’s controversial job bank website that are older than six months. A check by the Canadian Press proved him wrong. — File photo by The Canadian Press

The central bank says in a new research paper that unemployment rates have “overstated” the jobs recovery in Canada and particularly in the U.S. because they fail to capture a complete picture of what is happening in the labour market.

In the paper, the bank creates a composite labour market indicator, or LMI, that combines a broad range of measures to paint what it says is a more accurate picture of what has occurred since the 2008-09 recession.

The LMI, which includes less publicized indicators such as hours worked, wage growth, long-time unemployment, and labour underutilization, resolves one of the puzzles of current statistics that has the U.S. unemployment rate at 6.3 per cent.

That U.S. number is well below Canada’s 6.9 per cent, even though by all other measures the U.S. labour market is far weaker.

But it also shows Canada’s jobs recovery, while stronger than its southern neighbour’s, has not been as strong as the unemployment rate would suggest.

Between 2010 and 2013, the bank says Canada’s jobless rate fell 0.9 percentage points. But the LMI fell only 0.5 percentage points in the same period, suggesting more softness in the labour market than reflected in the official unemployment rate.

“Although the unemployment rate in Canada has evolved largely in line with overall labour market conditions since the recession, the article has shown that it may have modestly overstated the extent of recent improvement,” the research paper notes.

“This article highlights the need to consider a broad range of labour market variables in addition to the unemployment rate.”

The paper was one of five issued by the central bank Tuesday on the economy and financial markets, including reports on the increasing use of the loonie as a global reserve currency and on digital currencies.

Canada’s impressive job creation record since the recession has been a key talking point among Conservative government ministers to back their economic management, including until recently, support for importing temporary foreign workers to meet labour shortages.

 

Labour shortages exaggerated?

But there has also been discordant voices, including from the parliamentary budget officer (PBO), that suggest  labour shortages have been exaggerated. Recently, the government radically revised downward its estimate of job vacancies by dropping job postings from Kijiji after the PBO called the data unreliable.

Employment Minister Jason Kenney suggested this week in the House of Commons that there are no postings listed on the federal government’s controversial job bank website that are older than six months.

 

Many jobs no longer available

He said the normal maximum posting period is 30 days, even though — when checked — many of the jobs listed on the job bank are no longer available.

The new Bank of Canada research suggests that while Canada’s labour market  by some measures has recovered, by others there’s still a long way to go.

“The percentage of unemployed workers who are considered long-term unemployed ... peaking at just over 20 per cent in June 2011 ... has not shown much improvement. …” the bank notes. As well, “job-finding rates,” after an initial improvement following the slump, have “since fallen back to a level only slightly above the low point witnessed during the recession.”

In another research paper, the bank notes that the loonie has gained in prominence as a global reserve currency since the recession.

It calculates foreign governments now hold about US$200 billion in Canadian currency, almost twice the IMF estimate, or about 1.8 per cent of the total world reserve holdings.

The global confidence in the loonie, which is backed by relatively low levels of government debt, has resulted in lower bond yields and reduced Ottawa’s interest payments more than otherwise would have been the case.

But increasing use of the loonie as a reserve currency can also reduce market liquidity, the bank says, which can also cause bond yields to rise.

The bank also examined the growth of so-called digital currencies, such as the Bitcoin and Amazon coins, concluding that while they have the potential to challenge more traditional currencies, none is widely used at the moment.

 

QUICK FACTS

Despite Kenney’s claims, outdated listings persist on Canada Job Bank

Ottawa (CP) — There are no postings listed on the federal government’s controversial job bank website that are older than six months, Employment Minister Jason Kenney suggested this week in the House of Commons.

“The typical maximum posting period is 30 days,” Kenney said. “We only extend it beyond that if employers ask for an extension for up to six months maximum, after which the postings expire.”

However, many of the jobs listed on the job bank are no longer available.

Kenney often cites the 112,000 jobs posted on the site, and the 7 million hits it receives from job-seekers each month, as evidence of the need for Canada’s temporary foreign workers program, of which the site is a critical component.

The rules require would-be employers to post ads seeking Canadian workers for four weeks before they apply to hire temporary foreign workers. The government also relies in part on job bank data to determine what regions of the country are clamouring for labour.

Here’s a short sampling of outdated job postings — either already filled or no longer available — currently listed on the job bank.

 

 

Attendant, food service counter, Surrey, B.C.

Date posted: Oct. 30, 2013

Status: Position not found when clicking through as directed to WorkBC job bank.

Accounting clerk, Surrey, B.C.

Date posted: Sept. 6, 2013

Status: Position not found when clicking through as directed to WorkBC job bank.

Pipeline engineer, civil, Fort McMurray, Alta.

Date posted: Aug. 21, 2013

Status: “That position has been withdrawn” message when clicking through as directed to Workopolis.

Process operator, power engineer, Estevan, Sask.

Date posted: June 30, 2013

Status: “Error on page” message when clicking through as directed to SaskJobs.

Consultant, human resources, Brandon, Man.

Date posted: Aug. 13, 2013

Status: “We are currently not processing applications for this job order” message when clicking through to Workopolis as directed.

Automotive mechanic, Windsor, Ont.

Date posted: April 13, 2013

Status: “We’re sorry, this job is no longer available” message when clicking through to Workopolis as directed.

Account records manager, Hamilton

Date posted: June 26, 2013

Status: “We are currently not processing applications for this job order” message when clicking through to Workopolis as directed.

Database administrator, Boucherville, Que.

Date posted: April 26, 2013

Status: Error message when clicking through to Workopolis as directed.

Customer service representative, Moncton, N.B.

Date posted: April 24, 2013

Status: “Sorry, this job is no longer available” message when clicking through to Workopolis as directed.

Retail sales representative, Dartmouth, N.S.

Date posted: June 21, 2013

Status: “The requested job could not be found” message when clicking through to Workopolis as directed.

 

 

 

 

Organizations: House of Commons, Bank of Canada, IMF

Geographic location: Canada, U.S., Ottawa

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