A close look at today's labour force numbers indicates that fewer Canadians in all age groups are either working or are unemployed and actively seeking work.
While it is influenced by demographic trends such as an aging population, a falling participation rate is generally a sign that people have given up looking for jobs due to a low level of hiring by employers.
In 1939, the United States and much of the world were still struggling to exit the Great Depression that had begun a decade earlier. In that context, Alvin Hansen – the prominent economist and disciple of John Maynard Keynes – famously argued before the American Economic Association that the underlying problem was not cyclical, but rather “secular stagnation.”
Mr. Hansen anticipated an extended period of sluggish growth and high unemployment, due to a structural shortage of demand compared with already existing productive capacity. Under such circumstances, there were few profitable investment opportunities for business, resulting in excess savings and idle resources.
Coincidentally, perhaps, the most recent Statistics Canada numbers on job vacancies came out this morning. Compared to a year ago, there were 20,000 fewer job vacancies in Canada this April, and only 1.6% of all jobs were unfilled at the end of the month. Even in booming Alberta the ratio of unfilled jobs to total labour demand fell from 3.5% last April to 2.5% this April.
Brian Lee Crowley’s recent column in the Globe and Mail shows that he's a glass-half-full kinda guy. He says we shouldn't be worried about unemployment because a) it's old-fashioned, b) Boomers had it worse (and now they're getting old) c) we're doing better than the U.S., and d) it's really only young people and immigrants that are unemployed.
This is a relief.
So I shouldn't worry that the Statistics Canada Labour Force Survey indicates that real average hourly wages have risen by only twenty cents between 2009 and 2012 (an annualized growth rate of 0.3%). Or, that at the same time, real median hourly wages have actually fallen, indicating that any wage growth has been limited to a few at the top end.