Unemployment hits four-year low. But do not cheer.

By Erica Alini - Friday, February 8, 2013 at 10:30 AM - 0 Comments

To recap:

• Unemployment dipped 0.1 per cent to seven per cent in January, the lowest level in four years, but the decline came as more jobless Canadian stopped looking for work.
• Employment decreased by 22,000 jobs in January, in a widely anticipated decline after strong growth in November and December.
• Still, compared to January 2012, employment was up 1.6 per cent, or 286,000 jobs.
• There were fewer jobs in education and manufacturing, whereas employment in construction and public administration saw an uptick — the latter even though public sector employment as a whole fell by 27,000.
• The job losses were concentrated in Ontario, which mostly shed full-time positions, and B.C. Alberta, Saskatchewan and New Brunswick registered increases.

What the analysts are saying:

• Labour force participation dipped to 66.6 per cent in January from 66.8 per cent in the previous month, with 57,500 more Canadians abandoning their job searches. That was the largest monthly decline since 1995, noted TD’s Sonya Gulati.
• The employment dip was to be expected after several months in which job growth outpaced GDP, noted CIBC’s Avery Shenfled.
• RBC’s Dawn Desjardins struck a positive note. With headwinds from the global subsiding and interest rates low for the foreseeable future, she wrote, the economy will likely pick up momentum in the second half of the year. Expect unemployment to gradually decline to 6.7 per cent by late 2014.

The new underclass: Readers respond

By macleans.ca - Thursday, January 17, 2013 at 3:52 PM - 0 Comments

Last week’s cover story, “The New Underclass: Why so many smart, educated, ambitious young people have no future” hit a nerve with readers. Some thought it was dead on, others thought it was exaggerated, arguing that there are jobs out there. Here are some of the best responses sent in by mail, email and through social media:

Thank you for shedding some light on the way our education system has failed Canadian students (“The new underclass”, Society, Jan. 21). When I retired from the skilled trades a few years ago, the average age of tradesmen in Ontario was approaching 58 years of age. Yet still the education system was promoting a university degree as the best path forward. Skilled trades in Canada have been stigmatized by our education system, and it really came to a peak when special needs students came into the public education system and they were channelled into the “technical stream” and called something like “life skills.” That ended any interest normal students might have developed in following the technical stream as a path to the skilled trades.
Dave Bradley, Cargill, Ontario

During my 20-year career as a college professor, I observed the steady obsession by community colleges to become second-rate universities in staffing requirements, course content and political posturing. As well, my exposure to universities’ academic practices allowed me to learn of a fatal flaw in their philosophies of management. As an invited participant in committee processes at university, I was told what the students did with their education upon graduation was not a concern of the university, and that my recommendation of a “needs assessment” for a proposed new degree was not relevant or required. So now today’s students are processed by factory-like institutions that focus mainly on their own marketing-driven management mandarins. We must better define the specific roles, behaviours and outcomes of these publicly funded institutions. A structural and philosophical paridigm shift of the utmost magnitude is in order.
Neil O. Foster, Algonquin Highlands, Ont.

Thank you! You have no idea how great it felt picking up your Jan. 21 issue. Being part of the Generation Y cohort, I seriously almost cried. It finally felt like I had a voice. My generation’s plight will hopefully be heard, thanks to articles like this. It really hurts to be labelled as a bratty, entitled generation when we did everything asked of us. Is wanting the same middle-class lifestyle enjoyed by our parents and grandparents really too much to ask for?
Rishu Khan, Mississauga, Ont.

When I read “The new underclass” I felt very fortunate. I am a third-year agricultural business major, and ever since my first year, I have been working in my field. I’ve had five job offers for this summer in my field. I have no doubts about employment in a position I will enjoy after graduation. Our college graduates 300 agricultural students a year to fill 900 jobs available; employment within a year of graduating is 100 per cent in our field. The sad reality is, most students who grew up within city limits do not see agriculture as a viable option, because when they think agriculture, they think of a farmer breaking his back plowing and wrangling cows. The agricultural industry is very big business throughout the world and one that provides growth for innovative, educated and passionate young people in its field.
Marin MacNamara, Grand Valley, Ont.

Many young people either have no real marketable skill or the skill they do have is not demanded by society. There’s also the fact that so many retired people with excellent benefits and pensions, such as teachers, are taking jobs away from the young, which is most unfair. My husband knew a man who, while holding down a full-time government job, was collecting five good pensions. When my husband applied to the Bentley School of Accounting in Boston many years ago, which was one of the best in the United States, their slogan was, “We will teach you how to make a living, you can get educated on your own time.” Maybe our educational institutions should adopt the same philosophy. At least it would save a lot of people a lot of money.
Dolores Murray, Sarnia, Ont.

Why do so many young people have no future? We have lost a large amount of our manufacturing. No economy can function properly without an adequate level of manufacturing. Every Western country has the same problem and needs the same solution.
Edward J. Farkas, Toronto

As a mother of four, two of whom are in their early 20s and another two in high school, I was disappointed that your story suggested our young people have “no future.” My husband and I graduated in the mid-’80s. He worked as an engineer and I worked in advertising. Between us, we were able to rent a basement apartment. We still lived there when our first daughter was born in 1988. We continued to live in rented accommodation after our second daughter was born; I walked to a laundromat, kids in tow, for years. Those were tough times, but we lived frugally and when the housing market took a dive in the early ’90s we were able to buy one-half of a modest duplex. Many years, later, we were able to buy a detached home in a nice neighbourhood. It hasn’t been easy, but it has been rewarding. Canadian youth should know that there is a future, regardless of your background or level of education. Work hard, think creatively and be flexible, and you’ll be surprised at the riches life has to offer.
Heather MacDonald, Ottawa

Young people today are a product of parents’ obsession with only a university education. My own son went to community college for one year and then became a heavy duty mechanic apprentice. Now going into his third year of apprenticeship, he earns $65,000 a year before any overtime and he regularly receives unsolicited job offers. I am confident that he will not be a member of your new underclass.
Paul Schroeder, Winnipeg

The opening sentence of this article claims that “Melanie Cullins is no pipe dreamer.” Oh really? This 28-year-old you profile has no job, a husband doing contract work, no benefits or pension, two babies and she still expects to own a home in one of Canada¹s most expensive cities and get a job making the amount she would like to make in a job she would like to have. If this is not a pipe dream, I don’t know what is. If the expectation of the boomers’ children is to all live like this in their twenties, Canada is in real trouble. Later in the issue you point out careers where numerous jobs can be found. It is a shame it takes a magazine article to tell these people what industries the jobs are located in.
Jeff Brisbois, Port Williams, N.S.

The current blame for this problem is shared by all facets of our community: parents who expect their offspring all to be leaders, professionals, and rich but not have to get their hands dirty; educators who attract students with false promises of a bright future while offering underwater basket-weaving courses to expand their institution’s population with no emphasis on what it takes to “earn a living.” We need to require all high school graduates to work for two years prior to further higher education. Teachers should have experienced several facets of commercial life prior to entering the teaching profession. All employers of 10 skilled persons should be required to train one apprentice. Encourage the colleges and universities to teach practical courses that will result in gainful employment, and minimize financial support for students taking non-commercial courses. Explain to parents that there is no shame in living a life of basic rewards for meaningful work. The future of Canadian society as we know it will depend on getting this problem solved.
Brian Riden, Stirling, Ont.

You quote a professor of labour studies from McMaster University, who himself was in university for over 10 years, as saying “the risk of trade jobs is that technical change comes along and wipes out your trade.” All the technology in the world is never going to replace someone who can tape drywall, fix your furnace or climb hydro poles.
Evan Bates, Parry Sound, Ont.

Much of the bad news for today’s youth has been apparent for some time: the high levels of student debt, the underemployment, and the lack of skilled trades workers. What really shocked me, though, was the continuing disparity in earnings between men and women in the same profession (“The million-dollar promise,” Society, Jan. 14). What year is this again? In order to become a civil engineer, a nurse, a lawyer or a pharmacist, women and men follow the same curriculum, write the same exams, and pay the same tuition. It seems to me that tuition for women should be lowered to reflect the wage gap they will face upon entry into the workforce.
Mary Mackay, Ottawa

The story also ignited a debate online, with plenty of comments on Twitter and Facebook.

The new underclass

By Chris Sorensen and Charlie Gillis - Wednesday, January 16, 2013 at 9:45 AM - 0 Comments

Chad Hipolito

Melanie Cullins is no pipe dreamer. She chose a vocation that, by unanimous opinion, represented a path to steady employment—teaching English as a second language to the thousands of immigrants pouring into B.C., a good many of whom, the experts predicted, would be making their way to Victoria, where she grew up and wished to make a home. That was back in the early 2000s, when opportunities for the young and industrious appeared unlimited. A rewarding career seemed within reach for all.

Cullins’s degree in applied linguistics was the gold standard of ESL qualifications. But she graduated in the thick of the 2008 financial meltdown, and the entry-level position she imagined would launch her career never materialized. Governments cut back on language transition programs. Resumés piled up in recruitment offices. Her calls to program directors went unanswered. “For me, that was a huge blow,” she says. “I had almost perfect performance reviews from my practicums, but I couldn’t even get an interview. You start to wonder: what’s wrong with me?” Continue…

Hard times coming for labour relations

By The Canadian Press - Thursday, December 20, 2012 at 4:33 PM - 0 Comments

Ontario teachers strike at Stratford Central School in Stratford, Ont. on Dec. 10, 2012. (Dave Chidley/CP).

MONTREAL — After nearly a year of searching for a job close to home, welder Garnet Cooke is preparing to leave family behind and follow the trail blazed by many other unemployed Ontario workers who have headed west in search of a new life.

“I have been in this field for 35 years (and) I don’t wish to take any more steps backwards,” says the 54-year-old laid-off Electro-Motive worker.

Dave Clark said he’s gone through various stages of grief since he too lost his job at the London, Ont. locomotive plant after 18 years.

“There’s some really bad news out there. People are splitting, families are breaking apart, some people are filing for bankruptcy already. It’s tough.” Continue…

Good news on employment, bad news on Canadian productivity

By Erica Alini - Friday, December 7, 2012 at 10:48 AM - 0 Comments

There are three very important labour market releases out this morning: both Canada and the U.S. published their November employment numbers, and Statistics Canada also released the labour productivity growth figures for the July-September period.

Here’s a quick look at the numbers, plus a list of recommended readings if you want to know more about the context and significance of these economic indicators.

Employment and Unemployment in Canada

All is well in the Canadian labour market—much better than expected, in fact. The economy churned out an impressive 59,000 more jobs in November, well above the consensus expectation of a 7,500 gain. The hiring came mostly from the private sector and in terms of full-time jobs, and employment levels increased or were unchanged across all provinces. The unemployment rate dipped 0.2 percentage points to 7.2 per cent, the lowest level since March and below the consensus forecast of 7.4 per cent unemployment.

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How Obama and Romney are spinning the same job number in opposite ways

By Erica Alini - Friday, November 2, 2012 at 10:36 AM - 0 Comments

The much-anticipated October jobs report, the last major economic release before Nov. 6, is out and it continues to show a U.S. economy slowly edging forward on the path of recovery. At 171,000, the number of jobs added last month beat expectations, which were hovering around a gain of 125,000 payrolls. The politically important unemployment rate, however, edged up a tick, rising to 7.9 per cent from 7.8 per cent in September, likely a sign that discouraged job seekers are looking for work again.

None of this challenges the candidates’ narratives on the state of labour market, which run more or less like this:

What to expect from Canadian and U.S. employment numbers

By Erica Alini - Thursday, November 1, 2012 at 7:19 PM - 0 Comments

Getty Images

Both Canada and the U.S. will release October job reports Friday. Here’s what you should look for:

U.S.

The Labour Department’s Employment Situation report will be by far the bigger news story even in Canada, as Americans digest the last major economic release before the Nov. 6 election. The September release turned out to be pleasant surprise to the Democrats: it showed the unemployment rate had dipped to 7.8 per cent, the lowest it’s been since President Obama took office in January 2009. But many—including, of course, the Republicans—argued that the positive headline number masked a still anemic employment growth. Last month, the U.S. economy added about 114,000 jobs, below the 150,000 level that is traditionally thought to be the minimum needed to keep up with population increases. Still, some economists—including, notably, Paul Krugman—have noted that the smaller employment numbers might be here to stay. With baby boomer retiring, the argument goes, the pool of Americans of  prime working age is shrinking (according to Stephen Gordon, the same holds true for Canada, read more here). The question then is: do pre-recession estimates of how many jobs it takes to absorb population growth still hold?

Going back to tomorrow’s release, on Wednesday, economists polled by Reuters were predicting that the economy will have added 125,000 jobs in October—up from September—but that the unemployment rate will have climbed a notch as well, up to 7.9 per cent. The latter number, of course, is the one that really counts in politics, so any uptick from September’s record low would be mildly bad news for the White House. (Several political analysts are arguing, sensibly, that most Americans will cast their vote based on their own perceptions of the country’s economic situation, rather than the latest statistical release. Still, in a close race, everything counts.)

A different jobs report released this morning, however, gave the Obama Administration reason to hope. ADP, a giant payrolls processing company, said that the economy added 158,000 jobs in October. That may foreshadow a better-than-expected number in tomorrow’s Bureau of Labour Statistic’s survey and led some analysts to revise their forecasts up. Several economists interviewed by Reuters, however, cautioned against giving too much weight to the ADP report, noting that the company’s October data are based on a new methodology whose predictive power vis-à-vis the BLS survey is still untested.

Canada

Canadian employment has been edging up for the last three months, with 17,565 jobs added in September. CIBC predicts a slight dip in both the headcount figure, with 15,000 jobs added, and the unemployment rate, down to 7.3 per cent from 7.4 the previous month.

The most telling detail will likely be construction employment: in September it was still rising despite clear signs that the residential real estate market is cooling. A sharp drop in housing prices, Capital Economics recently calculated, could shave off as many as 115,000 construction jobs in a sector that currently employs around 890,000 Canadians.

How boomers are weighing down the employment rate

By Stephen Gordon - Tuesday, October 9, 2012 at 9:27 AM - 0 Comments

Getty Images

The unemployment rate is the best-known number published by the Labour Force Survey, but it is not the necessarily the most informative statistic about the labour market. According to the LFS, employment status is self-reported: you are classified as “unemployed” if you say that you are not employed and are currently looking for work.

There’s nothing wrong with this approach (especially since no-one can think of a better one), but it can lead to misleading impressions of trends in the labour market. One problem is the phenomenon of the “discouraged worker.” If the prospects for finding a job are so poor that an unemployed person simply gives up looking for work, she is considered to be out of the labour force and no longer officially unemployed. The reported unemployment rate will fall, even though labour market conditions have not improved.

There’s also the inverse phenomenon—the “encouraged worker”: when labour market conditions improve, people who had given up on finding work may resume their job search. This is what we saw in September: employment grew by 52,000, but the labour force grew by more than 72,000—likely because the better-looking labour market convinced some of the long-term unemployed to send out resumes once again. The result was that the unemployment rate increased from 7.3 per cent to 7.4 per cent.

One way of avoiding these sorts of complications is to set aside the sometimes blurry distinction between “unemployed” and “not in the labour force” and look at the employment rate: employment as a percentage of the working-age population. When you look at the employment rate, the labour market recovery looks very weak indeed:
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Time for the Conservatives to let go of the ‘job-killing carbon tax’ talking point

By Stephen Gordon - Friday, October 5, 2012 at 11:12 AM - 0 Comments

Getty Images

I have to admit it, I’m amused by the terrier-like grip that the Conservatives have on the “job-killing carbon tax” talking point: after the first few dozen times, it just got funny. But the fact that they’re still using that phrase—and that the NDP is doing its best  to dissociate itself from it—suggests that both sides think that the talking point is an effective weapon in the battle for public opinion. So here’s what you need to know about the “job-killing carbon tax” line: it’s wrong.

Carleton University’s Nick Rowe once noted that apart from measures that directly affect the functioning of labour markets—employment insurance, payroll taxes, etc—the best prediction for the effect of a given policy change on total employment is zero. In other words, most policy debates shouldn’t be about jobs. Free trade, HST harmonisation or corporate tax cuts may affect which type of work is done and at what wage, but they won’t affect total employment. Some sectors will see employment increases, some will see it decrease, and depending on the measure being discussed, wages will go up or down. But there will be no long-run effect on employment. There will likely be some short-term dislocation, as some people become temporarily unemployed and must re-train and/or move to find work, but in an economy in which 200,000 people lose or leave their jobs in a given month and a similar number are hired, these transitions are usually short-lived (though the adjustment to free trade with the U.S. took longer).

And so it would be with a carbon tax. Sectors that cannot absorb the tax will see declining employment, and employment in the other sectors would grow. If the tax is introduced gradually, these shifts will absorbed into the usual flows in and out of employment, and total employment wouldn’t be affected even in the short run.

To the extent that a carbon tax will reduce employment in certain sectors, then yes, it “kills jobs.” So does a cap-and-trade system. And more importantly, so do regulations. Just as with a carbon tax and cap-and-trade, the regulatory approach that the Conservatives now prefer increases the cost of doing business. Some sectors will be able to adapt to this, some will not. Same with a carbon tax.

Job-killing regulations!

It has a certain ring, doesn’t it? But I still don’t want to hear it.

Will ‘Welfare Air’ fly?

By Chris Sorensen - Monday, October 1, 2012 at 3:29 PM - 0 Comments

Darryl Dyck/CP

Mike Bernier, the mayor of Dawson Creek, B.C., handed out business cards to protesters during Occupy Vancouver last year. His message: why not come up north where jobs are plentiful and the cost of living is cheaper? Bernier’s pitch didn’t resonate with the camped-out crowd. They were more interested in finding jobs in balmy Vancouver, he says.

But someone was, apparently, listening in Victoria. The B.C. government this week revealed funding for a $2.9-million pilot program designed to move people off social assistance and into high-paying jobs—largely in the province’s north where resource industries are booming. Dubbed “Welfare Air,” the goal is to place as many as 250 people in new jobs, starting with those who already live in the region. If it’s successful, the hope is to expand the program province-wide in 2013.

Some local mayors aren’t totally sold on the idea. Lori Ackerman, the mayor of Fort St. John, says employers in the oil and gas sector increasingly want technology backgrounds and she’s not confident the program will do enough to train candidates. She’s also concerned about Fort St. John’s ability to absorb an influx of former welfare recipients from elsewhere in the province. “Our community’s social infrastructure is not as robust as what you may find in the Lower Mainland,” she says.

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Why the Canadian labour market is already back to normal

By Stephen Gordon - Thursday, September 13, 2012 at 3:35 PM - 0 Comments

The Labour Force Survey release for August was typical of LFS releases since the recession ended three years ago: modestly good news, but not enough to put a serious dent in the unemployment rate. When will things get back to normal?

The answer is “things are already back to normal.” Canadian unemployment rates simply don’t fall quickly back to pre-recession levels during a recovery (click on the graphs to open a larger version in a new window):

To understand why unemployment jumps up quickly but declines slowly requires looking at the dynamics of the labour market.

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Sighs in the night: Ann Romney on women, men and economic anxiety

By John Geddes - Wednesday, August 29, 2012 at 2:15 PM - 0 Comments

Among the more striking parts of Ann Romney’s polished, effective speech to the Republican convention in Tampa Bay last night, her observations about how women feel the pressure of tough economic times more acutely than men left me wondering.

Maybe that’s because I remember reading about how American males disproportionately suffered direct setbacks during the Great Recession. I’m thinking here of the 5.4 million men who lost their jobs in the U.S. between December 2007 and June 2009, or about seven men thrown out of work during the downturn for every three women laid off (although women have arguably fared somewhat worse than men during the recovery since then).

Why would we suppose that men don’t lose sleep the way women do about economic insecurity, especially so soon after a period when it was mostly men who were losing their jobs? Ann Romney, the wife of the Republican nominee to be the next U.S. president, asked her audience to concede that somehow, deep down, everybody just knows it’s women who bear more of the emotional burden during trying times.

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The myth of the ‘skills mismatch’

By Tamsin McMahon - Thursday, July 26, 2012 at 2:44 PM - 0 Comments

(J.P. Moczulski/CP)

Politicians and corporate executives are always decrying a “skills mismatch” crisis when talking about the paradox of companies who say they are having trouble finding enough applicants to fill vacancies even with unemployment in Canada still hovering above seven per cent.

As the story goes, there are plenty of unemployed workers anxious for jobs and plenty of employers scrambling to fill a glut of jobs that could help them expand their business and therefore create even more jobs. The problem, say politicians and HR professionals, is that the people looking for work aren’t qualified to handle the jobs that are available. The answer is usually a call for governments to spend more on education and to open the door to more highly skilled immigrants.

Matt Marchand, president of the Windsor Essex Regional Chamber of Commerce, cited a “skills mismatch” this month to explain why Windsor, which has been badly hit by the downturn in auto manufacturing, still has the highest unemployment of any Canadian city. (It topped 15 per cent in 2009 and is still around 9.5 per cent.) Part of the problem, he told the Windsor Star, was that despite a heap of unemployed workers, many of them coming out of the automotive and manufacturing sector, companies can’t find enough people to work as welders and machinists and are therefore having trouble expanding their business.

Enter former Times journalist at Harvard sociologist Barbara Kiviat, who argued this week in an essay in the Atlantic that the “skills mismatch” conundrum is largely a myth.

According to Kiviat, the skills mismatch narrative began in the 1980s and paralled the declining trend of on-the-job training and the rise of expensive universities and colleges, which shifted the cost and responsibility of training workers from the employers to the workers themselves.

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Who had it easy?: the job market greeting grads

By John Geddes - Monday, June 11, 2012 at 1:12 PM - 0 Comments

There’s been plenty of heated response to Emma Teitel’s “Boomers, You Folks Had it Easy,” column. It left me curious about what I suppose might be the most telling single indicator of the labour force’s ability to absorb new entrants—the unemployment rate for 15- to 24-year-olds. So I asked Statistics Canada for that data, going back through the decades. And here you go: six statistical snapshots of how the job market looked just after the spring graduation ceremonies:

Seasonally adjusted unemployment rates for youth (15 to 24 years) Canada

June 1962: 9.1 per cent

June 1972: 11.1 per cent

June 1982: 18.3 per cent

June 1992: 17.9 per cent

June 2002: 14 per cent

May 2012: 14.3 per cent

(Source: Statistics Canada, Labour Force Survey. Sticklers might want to note that the survey for 1962 and 1972 was slightly different than for subsequent years.)

Current EI reforms should be just the beginning

By From the editors - Friday, June 1, 2012 at 12:29 PM - 0 Comments

Todd Korol/Reuters

Assume for a moment you’ve been given the job of creating from scratch a federal program to help out-of-work Canadians find suitable employment as quickly and efficiently as possible. Would you begin with a system that provides greater benefits to workers who find themselves unemployed more often? Or provides incentives to stay in uncertain occupations forever? Would your ideal system offer identical Canadians vastly different benefits based solely on where they lived? And would you lard the program with inconsistent rules, such as offering benefits to self-employed fishermen, but not self-employed farmers?

Of course not. But this is exactly the sort of discriminatory, illogical and counterproductive system Canada has right now.

Last week Human Resources Minister Diane Finley unveiled a series of reforms to Canada’s much-criticized Employment Insurance program. While the changes don’t go nearly far enough to fix the entirety of EI’s problems, at least they mark renewed emphasis on the core task: getting people back to work.

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The quiet cuts

By Aaron Wherry - Monday, April 30, 2012 at 10:56 AM - 0 Comments

The Federal Tobacco Control Strategy is being cut, trade consulates will be closed, a coalition of organizations that deal with homelessness in Montreal won’t receive funding, neither will six groups studying women’s health, seafood inspection is being moved, regional development auditors are being eliminated, economists at Statistics Canada will have to compete for their jobs and StatsCan will start surveying less. David Pugliese wonders why Defence Research and Development Canada is being cut.

Kevin Page puts the short-term situation in perspective.

Ottawa’s ongoing planned restraint and 6.9 per cent cut in departmental spending will reduce its share of the economy from 7.3 per cent in 2010-11 to 5.5 per cent in 2016-17. That will have a direct impact on the economy, Page’s report stresses. It projects the spending restraints and cutbacks will reduce economic output by 0.3 per cent this year, climbing to 0.88 per cent in 2014.

Canada’s economy, subsequently, will grow by only 1.6 per cent in 2013, eight tenths of a point less than forecast by the Bank of Canada and the private sector consensus. On the jobs front, restraint will result in about 18,000 fewer jobs this year than had there been no restraint, climbing to 108,000 fewer jobs in 2015. Most of the losses are due to Ottawa’s actions — including a reduction of 43,000 stemming directly from March’s spending reductions — although provincial restraint is also a factor. Unemployment, currently at 7.2 per cent, will climb to 7.9 per cent in 2013, the report predicts.

U.S. unemployment rate tumbles

By Richard Warnica - Friday, February 3, 2012 at 11:03 AM - 0 Comments

The U.S. economy added 243,000 jobs in January, as the national jobless rate fell to a three-year low. The numbers, released on Friday morning, were likely the best news for Obama’s White House since Newt Gingrich won South Carolina.

With Americans heading to the ballot box in just nine months, a continued economic recovery will be key to Obama’s re-election bid. The New York Times’ Nate Silver suggested on Thursday the economy would need to add about 150,000 a month between now and next November for the president to have a solid re-election election chance.

It’s not an entirely rosy picture, however. Long-term unemployment remains intractable and the number of underemployed, scratching by with part-time work, continues to be alarmingly high.

In Canada, meanwhile, the economy added a mere 2,300 jobs last month as the unemployment rate edged up from 7.5 to 7.6 per cent. Job growth, robust only six months ago, has since slowed. The number of full-time jobs actually fell last month, with the slack being taken up by part-time work.

Problems may also loom in the housing market. The Economist warned on Friday that Canadians housing prices may not be sustainable, especially in Toronto and Vancouver. (To which Vancouverites, waking in their 7-figure bachelor condos, responded: “Poppycock!”)

New York Times

New York Times (blogs)

Globe and Mail

Economist

Economic boom brings a labour shortage to Newfoundland

By Alex Ballingall - Tuesday, January 31, 2012 at 10:20 AM - 0 Comments

Vale Archive

There may be no more surefire sign of an economic boom in Canada than a shortage of staff at the local Tim Hortons. It happened in northern Alberta when Fort McMurray exploded with oil sands-related activity. And now it’s happening in Deer Lake, in western Newfoundland. “We’re in the midst of a period of poor availability,” says local Tim Hortons’ owner Oral Clarke. He plans to bring in foreign workers from the Philippines to fill out his staff.

For a town of 5,000 that sits at a highway interchange near the entrance to Gros Morne National Park—never mind in a province with the highest unemployment rate in the country at 13.1 per cent—this may seem like a strange conundrum. But it’s indicative of a growing problem on the Rock. After decades of being Canada’s archetypal “have not” province, Newfoundland and Labrador is experiencing an unprecedented economic boom. And the record expansion brings an unfamiliar problem: an acute shortage of labour. “For years we’ve had people leaving the province because of too few jobs,” says Richard Alexander, executive director of the Newfoundland and Labrador Employers’ Council. “All of a sudden there’s been a switch and we’re entering an area where we have excess jobs and too few people to fill those jobs.”

More than $43 billion is pouring into major development projects across the province. Among the most prominent are the $8.3-billion Hebron offshore oil platform, the $3-billion Long Harbour nickel processing plant, and the $6.2-billion Muskrat Falls Lower Churchill hydroelectric project. The government surplus—once a rare figure on provincial balance sheets—climbed far beyond expectations to $755 million last year, thanks mostly to oil revenues, says Memorial University economist Wade Locke. In a report titled “ Outlook 2020,” the province estimated that 77,000 job vacancies will open up over the next eight years (with more projects announced since the report, that estimate is widely perceived to be conservative).

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What happens when Canada’s housing bubble pops?

By Erica Alini - Thursday, January 26, 2012 at 1:56 PM - 0 Comments

A few days ago, Bank of Canada governor Mark Carney released another alarming, albeit muted, warning shot about the state of the Canadian real estate market. Some properties in Canada are “probably overvalued,” the central banker said during an interview with CTV. Last week Finance Minister Jim Flaherty hinted he is also worried about housing: “We watch the housing market carefully and we are prepared to intervene if necessary,” he said.

So, are we literally living in a bubble? And when it bursts, will it get as ugly as it did south of the border? Here’s where the most recent speculation is pointing: Continue…

Ghana’s cursed growth

By Paul Carlucci - Tuesday, January 10, 2012 at 2:29 PM - 0 Comments

Photograph by Paul Carlucci

The West may be paddling an ocean of debt and disorder–naught but austerity and tatty lifestyle reductions–but Africa is booming, especially Ghana, one of the world’s fastest growing economies in 2011.

In this West African nation, it’s the era of oil. Tapped just over a year ago in the Gulf of Guinea, the Jubilee Oil Field contributed seven per cent of the country’s 14.6 per cent growth last year. A reported 23 million barrels were lifted out of the field in 2011 by Ireland’s Tullow Oil and other stakeholders. The Ghana National Petroleum Corporation, a 13 per cent shareholder, lifted $344 million-worth.

But discoveries of vast natural reserves are notoriously a tricky thing to manage. There’s the text-book case of the Netherlands–which economists dubbed the Dutch Disease–, where natural gas reserves found in the 1960s lead to an appreciation of the local currency that eventually chocked a number of domestic exporters. And then, of course, there’s Nigeria, where billions in oil wealth did little to relieve the wretched poverty of the Niger Delta region.

Ghana is having its own share of troubles. Critics say millions have already been lost in unpaid corporate taxes and a skewed royalty system. Meanwhile, the oil-propelled growth has failed to create jobs or spur development in a country that, despite its recent elevation to lower-middle income status, still struggles with grinding poverty in its urban, rural, southern and northern regions.

“The growth associated with oil development is false-growth because the investment does not have direct bearing on the economy,” says Mohammed Amin Adam, an energy economist and the national oil coordinator of Publish What You Pay Ghana, an advocacy group. “Development hasn’t kept pace with growth,” he adds. Despite the GDP numbers, “more and more people are coming under the poverty line.”

There are three issues the government needs to address if it wants to turn Ghana’s oil sector into a ground-level growth machine, says Adam. The first revolves around supply side economics. Ghana is largely an import-based economy. It ships away its raw materials–gold, timber, cocoa–for production elsewhere, then buys back finished products. The influx of oil revenue, says Adam, is playing up this dynamic, swelling up demand that can’t be met domestically. If the supply side can’t match the rise in demand from the inflow of oil revenue, the result will be inflation, he says.

And the oil money is feeding another beast: corruption. Unquestionably, Ghana is not new to the problem. An anti-corruption NGO recently estimated that the country loses $4 billion a year to pernicious seepage, and Transparency International ranked it 69th out of 183 countries in its 2011 Global Corruption Perception Index. But civil society watchdogs worry that the oil bonanza will ratchet up greed in 2012, an election year, and beyond.

Bribes and graft, in turn, will “increase the cost of investment,” predicts Adam. He’s talking about general investment, including in non-oil sectors, where the potential lies for Ghana to create the jobs it needs. The oil boom, in fact, has been largely jobless. Unemployment was at 11 per cent in 2000, according to the latest census, but the government plainly admits it doesn’t know how many people are out of a job these days. One thing is for sure, though, pouring more of the oil money into the agricultural sector would help put people to work, says Adam. Agriculture made up about 16 per cent of  Ghana’s GDP in 2011, and that’s where a big portion of the country’s permanent jobs are. “Depending on how we spend the money in the non-oil sector that have higher growth potential, higher employment potential, like agriculture, then that could help the country,” muses Adam. A planned Heritage Fund is meant to address these sort of ideas about how to use the oil money. Alas, it only accounts for only nine per cent of that revenue.

Economy sheds most jobs since 2009

By macleans.ca - Friday, November 4, 2011 at 10:12 AM - 1 Comment

The October jobs report was unexpectedly grim, with the economy shedding 54,000 jobs, the Globe and Mail reports. It was the single worst monthly result since 2009. All the losses came from full-time positions, particularly in the manufacturing and construction sectors in central Canada. The unemployment rate rose from 7.1 to 7.3 per cent.

The Globe and Mail

War on Wall Street

By Claire Ward and Nicholas Köhler - Monday, October 10, 2011 at 10:40 AM - 29 Comments

Andrew Holbrooke/Corbis

Last Sunday, just before 7 a.m., as the sun cast its first light on Manhattan, cold, damp Zuccotti Park, just south of Ground Zero and north of Wall Street—those twin poles of a shattered American psyche—looked like little more than a junkyard. Shopping carts, blankets, garbage bags, sodden pizza boxes, piles of cardboard protest signs. Most of the two or three hundred anti-Wall Street protesters camping out there were wrapped in sleeping bags and under tarps, the pigeons pecking about their heads. A couple snuggled together on an air mattress. An elderly man in combat fatigues, his grey hair tied back in a bandana, slept against a concrete wall, a German shepherd at his side. Such were the moments of first light, before the makeshift village in Zuccotti Park came to life.

When the people awoke they gathered in groups to discuss ideas: corporate control, securitization, debt and credit, the environment, the Federal Reserve. There was heated debate and a lot of hugging. “I see it as a mathematical improbability to have a growth-based system based on finite resources,” said Tim, a 57-year-old bassist from New Haven, Conn., with long grey dreadlocks. “It’s kind of depressing, to be honest with you. I think the bottom is going to have to fall out of the economy.” When a protester approached asking for rolling papers, Tim promptly produced some from his pocket. “The solution is money,” said Rick DeVoe, 54, an environmental activist from East Hampton, Mass. “If the dollar doesn’t work for us, let’s create something that does.”

Over by the info booth a mousy girl in her 20s handed out a newspaper—The Occupied Wall Street Journal, a deliciously tongue-in-cheek jab at Rupert Murdoch’s business broadsheet. On a nearby table, various pamphlets lay strewn beside a Macdonald’s coffee cup and a well-thumbed copy of Dostoevsky’s Notes from Underground. A white-haired soccer mom on vacation from Tennessee, all smiles and glasses, asked if there was a petition to sign. Volunteers distributed food from the kitchen—concrete benches laden with donated bagels, coffee, juice. At the media centre, marked off with caution tape, youths sat on cement benches glued to MacBooks, spreading the word on various social media networks. @OccupyWallStNYC, one Twitter handle among many here, had some 39,000 followers as of Tuesday.

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The Commons: Carry on

By Aaron Wherry - Monday, September 19, 2011 at 5:22 PM - 25 Comments

The Scene. The Speaker called on the leader of the opposition and Nycole Turmel stood in her spot, just to the left of the conspicuously vacant chair. The New Democrat caucus stood to cheer and the Conservatives across the way offered a round of applause. After Ms. Turmel had finished with her first question, the Prime Minister stood and congratulated her on having done so.

The congeniality ended there, or at least very soon thereafter. And let us be thankful for that.

For however the passing of Jack Layton is to influence our politics from here on—and in many ways for various reasons it would be good if it did—it should probably having nothing to do with reducing Question Period to a polite exchange of demure musings and rhetorical hugs. A Question Period without accusations that one or another is in league with terrorists or criminals might be nice. But a Question Period without vigorous disagreement, raised voices and scathing indictments would be a silly legacy for a man who so often revelled in such stuff.

Credit then to Mr. Harper, who, with his second response, opted to suggest aloud that Ms. Turmel hadn’t the faintest idea what she was talking about. Here was the signal that it was okay to impugn again.

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Is Obama finished?

By Luiza Ch. Savage - Monday, September 19, 2011 at 10:20 AM - 53 Comments

Kevin Lamarque/Reuters

Two and a half years into Barack Obama’s presidency, Obamamania has given way to Obamamisery. Fourteen million Americans are out of work. The unemployment rate remains stuck above nine per cent. The net number of new jobs created last month was exactly zero. And nearly one in six Americans live in poverty—the most in 27 years.

Sure, the former Illinois senator was dealt a raw hand—elected in the midst of an economic crisis and two long, costly wars, at the burst of a credit and real estate bubble that would take years to unwind. In his inaugural address, the new President acknowledged “a nagging fear that America’s decline is inevitable.” But Obama had promised to be the man of hope and change. “Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America,” he told the millions people who had travelled from around the country and the globe to witness him take office and end the era of George W. Bush.

In January 2009, the unemployment rate was 6.9 per cent and Obama’s approval ratings were over 60 per cent. The question that framed his presidency was whether he would lead the country out of crisis the way Franklin Delano Roosevelt led the country out of the Great Depression, or whether he would become the next Jimmy Carter—a weak, one-term president done in by economic malaise and failures abroad.

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