Dip in unemployment could be an anomaly, experts say

Students returning to school, retirees shrink labour force

A dip in Manitoba’s unemployment rate doesn’t necessarily mean more people will be walking to work in the future, economists say. Candice Tonelete

Manitoba’s unemployment rate fell from 5.7 per cent to 5.3 per cent in September, according to data recently released by Statistics Canada. While this could be viewed as one of many signs that the recession has ended, experts agree it is still unclear whether Manitoba’s unemployment rate will continue to fall.

More data over a longer period of time would be needed in order to determine whether this is a trend that will continue, experts say.

When students returned to school in September, Manitoba’s labour force shrank.

“With fewer people looking for the same number of jobs, the unemployment rate fell,” said University of Winnipeg economics professor Hugh Grant.

Greg Mason of Prairie Research Associates notes that “the fall is more likely a short-term variation” or could be due to survey or measurement error.

Manitoba’s economy is based on a mix of farming, manufacturing, resources, construction and finance. This diversity allowed Manitoba’s labour market to come through the recession in a better position than provinces dependent on the United States market.

While Canada’s unemployment rate went from 6.2 per cent at the start of the recession to 8.5 per cent, Manitoba’s increased “much more modestly,” said Grant.

“Manitoba’s economy, like its inhabitants, is not particularly flashy – just steady and stable,” said Grant.

Further, Manitoba has traditionally exported its unemployment to other provinces. Some Manitobans have moved away to provinces with more vibrant economies like Ontario, British Columbia and Alberta in search of jobs.

Whether Manitoba’s unemployment rate continues to fall depends on the recovery of the Canadian economy and demographics. Wayne Simpson of the University of Manitoba economics department said there would need to be “growth in the private sector” in Manitoba and across Canada in order for more jobs to be created.

Peter Holle of the Frontier Centre for Public Policy points to changes in demographics.

“More retirees coupled with fewer people entering the labour market equals falling unemployment,” Holle said.

For graduating students or those looking for work, these figures provide some reason for optimism.

“The prospects … are good,” said Mason.

Pointing to Canada-wide growth forecasts of three per cent for 2010 from Statistics Canada and the Conference Board of Canada, Simpson agrees that students looking for work, particularly Canada-wide, should be successful.

As more jobs are created with the recovery of Canada’s economy, however, the quality and nature of those jobs needs to be considered.

Lynne Fernandez of the Canadian Center for Policy Alternatives notes declines in unemployment are welcome, but questions the types of jobs that might be created.

“Are they the sort of jobs a family person can actually live on, or are they low-paying, precarious jobs?” she said.

For students seeking to cover current education costs with future employment income, the types of jobs could be just as important as whether or not jobs will be available.

Published in Volume 64, Number 10 of The Uniter (November 5, 2009)

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