20 September 2010

Labour force indicators raise questions about economic health and competitiveness

In a recent Fraser Institute study of labour markets in North America, Newfoundland and Labrador came in 49th out of 60 overall.  The study measured performance in five indicators:

  • average total employment growth,
  • average private-sector employment growth,
  • average unemployment rate,
  • average duration of unemployment, and,
  • average gross domestic product per worker.

The study also assessed the level of public sector employment, minimum wage rate, level of unionization, labour relations laws and what the study authors termed “other areas of concern”.

Here’s how Newfoundland and Labrador placed in nine of the categories for which there was a readily measurable score that compared jurisdictions straightforwardly.   

Some of these figures, like the private sector as a percentage of the labour force, will be very familiar to Bond Papers readers. Now there is some context for them that shows they are cause for concern not just in and of themselves but because they raise serious questions about the overall health of the economy and about the province’s competitiveness.

It should almost go with saying that anyone arguing for an increase in public sector employment is out of touch.

  1. Average total employment growth (2005-2009):  38th place with 0.1%.  That’s the weakest of the Canadian provinces.  The next weakest was Nova Scotia with 0.5%.
  2. Average private-sector employment growth (2005-2009):  34th place with 0.0%.
  3. Average unemployment rate (2005-2009):  60th place with 14.5%.
  4. Average duration of unemployment (2005-2009):  17th place with 14.9% of the unemployed being out of work for 27 weeks or longer.
  5. Average GDP per worker (2005-2009):  eighth place with $134,494.
  6. Average provincial public sector employment as share of total employment (2005-2009):  59th, with 24.8%.  Nevada and Pennsylvania topped the ranking with 9.4% and 9.5% respectively.  Only Saskatchewan beat out Newfoundland and Labrador for the bottom spot with 24.9%
  7. Average public sector employment (fed/prov/mun) as a share of total employment:  60th place with 28.2%
  8. Average minimum wage as percent of GDP per worker (2004-2008):  10th place, 12%.
  9. Unionized work force as a percentage of total work force (2005-2009):  59th, with 38%.  Quebec was the most unionised jurisdiction, at 39.9%.  North Carolina was the least with 4.3%.

Some of the other areas of concern are also interesting to note.  Newfoundland and Labrador showed the most days of work lost per 1,000 employees due to industrial disputes. (390 days, 2004-2008) That was three time the number of days of the second spot, British Columbia, with 127 days. Quebec – in third place – had a loss work days of 75 days.

And here are a couple of measures for just the past year:

  1. Average unemployment rate, July 2009- June 2010:  60th place with an average unemployment rate of 15.4%. 
  2. Average total employment growth, July 2009-June 2010:   tied for second place with 0.2% average growth.

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