Summary
Canada's job losses in January has been the worse compared to the previous economic downturns in the 1980s and 1990s. Currently, almost more than 120,000 full-time jobs are lost. These job losses include in specific areas such as motor vehical manufacturing, production of furnitures, and computers and electronics. All these areas of unemployment are effected in British Columbia (18,000), Quebec (30,000), and in Ontario (71,000). The unemployment rate has increased by 0.6 percent in January to 7.2 percent. This increase of job losses will continue to grow and thus, leading to a major recession. Economists has described the situation during January's job losses as "horrible" and "shockingly poor." As bad as this sounds, there is still hope. A BMO economists has predicted that "Canadian unemployment rate to break through eight per cent by the end of this year." That being said, BMO plans to announce another interest rate cut in March.Relationship
In chapter 5, we learn the importance of employment and unemployment. In this case, it is obvious that the economy is facing an increased amount of unemployment as people are being laid-off. To determine an approximate amount of unemployment and employment in Canada, we use the Labour Force Survey. It provides monthly data on Canada's unemployment rate which is calculated with a formula: unemployment = unemployed/labour force
The survey provides information on the number of unemployed, but not on the number of job vacancies. That is, the solution to the unemployment problem depends on the number of job vacancies available. Thus, if jobs are available, then a way will have to be found to match the unemployed workers to the available opportunities. This relates to the article as many people are being laid-off are in need of jobs. Also, in the chapter, it states that sex and age are affected differently. In 2002, men who were 25-44 years old had an unemployment rate of 7% while women of the same age had an unemploymnet rate of 6.7%. In this case, it is not true as the whole economy is affected the same way. People are losing their jobs either if they were male or female, ages 24 or 50. In addition, in the article, economists have stated that Canadian job losses has gotten even worse compared to previous years. To give a general idea of how bad it has been for the past couple of months, the unemployment rate was only 3.4% in 1966, 5% in 1990s, and 5% in 2002. Compared to now, we currently have an unemployment rate of 7.2% a 15 year high according to Bureau of Labor Statistics.
Conclusion
As we can see, the labour Force Survey is an important tool to our country and economy. It helps determine an approximate percentage of employment and unemployment. Most importantly, it shows us what we have to work on. If in this example, economy is suffering from a recession and many people are losing jobs, then we need to start finding solutions and providing more jobs. Though this info is useful, it is not necessarily accurate. Many factors such as participation rate affects the result of these surveys. Thus, economist still make approximations to help balance our economy.
2 comments:
The recession took a huge toll not only on Canada but on other countries as well. It, brought on by many factors such as decreased consumption, forced many companies to fire less efficient employees in order to retain profits.
Over 100,000 jobs were slashed in January and the economy is showing no signs of improving. Most companies are firing people on a daily basis decreasing the overall sense of financial security in the population. This in turn, decreases the consumption rate only further fueling the flames of the recession. The unemployment rate also needs to be kept low in order to keep the population content. The whole world is currently going through the same situation and if it doesn't improve, it may even gradually lead to a crisis and then ultimately, depression.
---Rafaat Mir---
Many people don't realize how much unemployment can do to the economy. An increase in the rate of unemployment can significantly cause consumer spending to decrease. This is because as people are losing jobs, income is shrinking, and people are more likely to save their money than to go out and spend it. Such decreases in demand for products will in turn create more laid-off people, and the cycle continues. Seeing Canada's unemployment rate increasing so fast is frightening, for 0.6 percent to 7.2 percent is quite a big jump. In addition, this isn't just happening in Canada, as other parts of the world, like mentioned in my article, Japan is also suffering from unemployment as well. I agree with you completely that the unemployed should start finding new jobs, not only for the sake of themselves, but also for the rest of the country.
K. Chan
Block F
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