Friday, December 04, 2009

Beware of End of Year Job Numbers

Today, Canada’s federal government released the latest unemployment rates for the country – painting a rosy picture if you believe ‘em.

According to Statistics Canada, the country’s unemployment rate dropped last month by a tenth of a point since October. Canada’s official unemployment rate now stands at 8.5 percent.

The government claims this is because the number of full-time jobs increased by 39,000 in November, which is the third straight m

MIAMI - MARCH 27:  Gregory Tai, who lost his j...Image by Getty Images via Daylife

onth of an increase. Part-time jobs also increased by 40,000 – previously they had decreased in the past two months of October and September.

That means we saw 79,000 new jobs created in Canada – if you believe all the media hype. For most of us, the worst global disaster since The Great Depression of the Dirty Thirties is still rampaging its wrath. I personally know many families which continue to struggle to put food on the table, despite the constant headlines hollering that the economy is improving.

Chances are if you aren’t one of the millions looking for work, you know someone who is. So as you hear the network news anchors boast about our country’s new low unemployment rate, you may ask yourself: “so how come my friend is still out of work?”

Truth is the unemployment rate just doesn’t take into account the very basis for real value employment in this country – or any country for that matter.

The federal government’s statistics do not take into consideration the largest area of employment for the past twenty-years – self-employment.

The Causes of The Great Depression / FDR Memor...Image by Tony the Misfit via Flickr

Over the past two decades, companies have been hiring fewer and fewer on staff, favoring the more cost effective approach of bring in people on contracts.

Also, as the economy shrank in the recessions of the 1990’s and today, many people were let go, at times when there were no jobs. Many simply gave up looking for work, and went into contracting as they were unable to find anything else.

Last month’s self-employment numbers fell sharply by 32,000 self-employment jobs according to Statistics Canada. These numbers are not considered in the unemployment rate calculations, the government thinks of them as more of a wild card which indicates the volatility of the job market.

Not only do the unemployment rates not consider one of the largest sectors of jobs in the country, they also fail to take into account the real money maker for most people – hours worked. The Canadian government only compares full and part-time positions – they don’t take into account the actual number of hours people work, and that’s what really affects most pay cheques.

The total hours worked actually declined last month by 0.3 percent according to Statistics Canada. This means although more people were being hired, they were working fewer hours, so in the end, were being paid less.

WPA poster 1935 USA, color photoImage via Wikipedia

When people don’t make as much as they once did, they cut back on spending, and that means less money being distributed into the economy, which fuels economic downturns such as a recession or depression. Statistics already are indicating that most Canadians plan to spend 40 percent less on holiday gift purchases this year than last year – and last year at this time we were well into the worst economic decline since The Great Depression.

And to add some vinegar to a widening wound, most of the increases in employment were in the education and service sectors.

In the education sector, this increase could be due to budgets needing to be spent before year-end, otherwise the money is gone for good. Meaning next year at this time, we could see a sudden loss of jobs in this sector, as everything eventually balances out.

The December holiday shopping season always boosts employment in the service sector at this time of year, as those in this sector make most of their profits during this time. Many companies in the service sector hire part-time temporary workers to fill the holiday rush, only to be let go either at the end of the year or early in the New Year. So again, these numbers are not a good sign of more jobs and a better economy.

So, how will you know when the economy really is booming again? You’ll know from your own experiences, and the experiences of the people in your life, long before the Canadian government’s statistics confirm what you and your family and friends experience.

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