Link: http://victoria.tc.ca/~reed

Even as our local economy sputters, the "feel good" headlines continue with predictable regularity in our local media. Yesterday’s Times Colonist, for example, (Carla Wilson, September 11, 2010) proclaimed: “Region bucks national trend as unemployment rate slips.”

It is true that the unemployment rate dropped from 5.8% in July 2010, to 5.5% in August 2010, and year-on-year the rate dipped -0.2%. Things are looking up—right?

Well, maybe not. From the Statistics Canada data series, other measures of the health of our labour force suggest that there is much less reason for optimism. In August 2009, there were 181,400 employed persons in Victoria; there are now 177,100: A net loss of 4,300 jobs (-2.4%, all data seasonally adjusted). For comparison, over the same period, the employed labour force in Vancouver gained 24,600 jobs (+2.0%), and in Toronto a net gain of 121,300. Ken Stratford (Business Victoria CEO) is quoted in the same article, saying: “I think we are doing okay—could be doing better—but we are better off than most of the country.” Within the very narrow context of the official unemployment rate, he is correct; but one simple metric cannot capture the complex dynamics of the labour force.

Our labour force is shrinking. The size of our total labour force (TLF) plummeted by 4,800 in the past year. In February 2010 it peaked at 198,200 (CRD data); in August 2010, it was 187,600: our labour force has actually contracted by 10,600 in six short months: where did these people go? Some undoubtedly retired, but it is a well-documented fact that in a weakening economy many people quite simply give up looking for work (discouraged workers: those who according to Statistics Canada are neither employed nor unemployed). It is also a fact that this withdrawal from the labour force artificially depresses the unemployment rate. We are one of the few census metropolitan areas (CMA) in Canada with a shrinking TLF, a net loss of jobs, and a lower unemployment rate (Abbotsford, Kitchener-Waterloo, and Windsor share this dubious distinction).

The Statistics Canada labour force survey (LFS) also identified that in July 2010 there were 178,800 employed in Victoria; in August 2010 there were 177,100 employed: we have lost 1,700 jobs in the last month alone (Last year there was no change between the number of employed in July and August, so we can effectively discount student employment dynamics as a cause).

Simply utilizing the "unemployment rate" as a measure and comparison of our economic fitness does not capture the reality of the labour market(s). When other metrics are included, the results can seem counterintuitive; for example, we are experiencing a declining rate of unemployment (promoted by some as evidence that our economy is recovering), yet there are fewer people employed. If this paradox can be attributed to a deflationary cycle, then why are most other markets in Canada not experiencing similar declines in their employed labour force?

Irrespective of the unemployment rate, Victoria's economy is listless and faltering; an objective and more rigorous analysis of the data would have revealed this.