When it Comes to Canada’s Labour Situation, It is Complicated

By The Policy School of the University of  Calgary

Labour markets in Canada are complicated.  Employment patterns vary greatly by age, by region and according to current economic conditions.  They also have a great deal to tell us about the real state of the economy.  With talk of a new recession, Canadians hear concerns from news reports and economists that the last recession accelerated the rise of a labour force made up of precarious part-time, contract, temporary or self-employed workers. But the evidence contradicts that. The share of those jobs has not increased significantly in recent years and the vast majority of people who work part time do so voluntarily, not for lack of other  options.

A report released today by The School of Public Policy and author Philip Cross offers surprising results on Canada’s labour market and opens the curtain on what could be the most important economic indicator we have. According to Cross “Unfortunately, people are too obsessed with the outcome of the labour market in terms of income distribution and don’t pay enough attention to the efficiency of the labour market – getting the right people with the right skills matched with the right employer wherever they are  located.”

The impact of the 2008-2009 recession on Canada’s labour market was much different than in the U.S. Mostly this reflects that job losses were smaller and recouped quicker in Canada. We did not experience the structural increase in unemployment that the U.S. experienced – partly a mismatch between workers skills and the skills needed by the  economy.

The debate over how the Canadian economy is actually faring lacks a proper understanding of how the labour force is performing.  We are often side-tracked by interesting but less relevant debates about, for example, the Temporary Foreign Workers program.  The important indicators are the match of worker’s skills to demand for skills, the participation of youth in the labour force, and labour force variations across regions.  And, while there are areas that ought to be monitored for a public policy response, the author argues that overall, Canada is performing  well.

The paper can be downloaded at  http://www.policyschool.ucalgary.ca/?q=research

SOURCE The School of Public Policy – University of  Calgary

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