13 February 2014

The (un)booming economy and population growth

“Bullshit,” wrote philosopher Harry Frankfurt a few years ago, “is unavoidable whenever circumstances require someone to talk without knowing what he is talking about.”

Enter Danny Williams, Doc O’Keefe, and Tom Hann.

The  T’ree Amigos dismissed the Conference Board of Canada’s recent population projection for the province with the simple argument that the booming economy  in the province - due largely to oil - would attract people here in droves.

That’s a really interesting idea because we can actually look at the evidence available to see if that might be true.  The province has been doing very well economically for the past decade.  Arguably, the province was even doing fairly well for the decade before that, compared to the 1970s and 1980s what with oil development that started in the early 1990s.

So what happened?

Well, the population in the province hasn’t been booming. 

Far from it. 

As SRBP noted on Tuesday, the population dropped steadily until 2007.  That’s the year when people came back to the province in advance of the recession, in a pattern that’s been repeated several times over the past 30 years.  The province’s population rebounded slightly, but it sits today – pretty much stagnant – at around the same population as in 2000. 

It’s not hard to see what is happening.  The information is readily available. 

Take the births aspect of population change.  People in Newfoundland and Labrador are not having as many babies as they once did.  Indeed, that’s a fairly common of successful economies in developed countries around the world:  people don’t crank out the babies like they did once upon a time not so long ago.  It’s a trend people have observed in Newfoundland and Labrador over the past three or four decades. 

Why St. John’s city councillor Tom Hann can’t figure any of this out is baffling but, apparently he can’t:

I don’t know what the methodology was, or how they did the research, but I think they’re way off base, and they’re not thinking in terms of coming here and being on the ground and investigating…

Tom’s here on the ground.  Maybe he should try looking around.


SRBP looked at a related part of this in December 2012 in a post about the provincial baby boom that did not happened despite the cash prize from the provincial government.  Here’s one picture from that post, followed by the commentary on it.


The light coloured segments represent the baby boomers.  Look at the bars below those light ones to get a sense of the population of child-bearing age coming along in the years immediately ahead.

Uh huh.  As you slide those numbers along, the baby boomers are going to shuffle off this mortal coil at a higher rate than the babies are likely to come along.

That is, unless the number of babies per woman goes up dramatically.

And since the number of babies per woman is not going up, then we get the obvious result:  population decline.

This is not rocket science, people.

Then there’s the migration thing.  People come to the province.  People leave.  Population will go up if the number coming in is bigger than the number leaving.  Take a look at the provincial government’s own numbers.  Even in the couple of recent years when we had a net positive in-migration (that is, more people coming than going) we still had upwards of 8,000 or 9,000 people heading off to somewhere else, every single year.

It’s hard to build up a population when you have that many people heading off to other places.  What’s more, these people are typically in their 20s and 30s, the prime years for having children.  Again, it’s not rocket science to understand that the population has been dropping.

The Unbooming Economy

All that confirms most of what the Conference Board and the provincial government’s own forecasters have been saying.  It also undermines the hope that somehow economic activity can overcome the problem of a declining population.

But to really drive home the point, you have to look not so much at the babies but at the economic activity in the province.  People think oil is driving the economic growth, especially in the metro St. John’s area.

But that’s not the case. 

Employment in oil and gas extraction, mining and quarrying has gone from about 6,000 jobs in 2003 to 12,600 in 2013.   That looks pretty impressive.  Employment doubled in the province.  It includes Voisey’s Bay and growth in western Labrador mines.  But it is only about 6,000 jobs.

In the chart below, these jobs are shown by the blue line.

oil employment

The red line represents the jobs in construction.  They’ve gone from 9,600 jobs in 2003  to 21,500 jobs in 2013.  That’s an additional 11,900 jobs in a decade - almost as many jobs as the entire oil extraction and mining industry. 

To get a complete picture of how much of an economic impact those sectors are having we’d have to dig down a bit to look at what those construction workers are doing and what they were earning. But at least, we can see that if we are looking at population, the oil industry pales in comparison to construction for job creation.

Both construction and oil/mining can’t match another sector, though, for job creation over the past decade.  The public sector added 12,100 new jobs between 2005 and 2013.  If we counted the 2012 peak, it would be more than 13,000 jobs. public sector

Basically, there isn’t some private sector economic boom in the province that is creating huge numbers of jobs that will lure all sorts of new immigrants to the province.  Saskatchewan’s population grew by 22,000 people in one year (2012).  Even if we all those jobs in oil, construction, and the Newfoundland and Labrador public sector together, we’d only be talking an average of fewer than 3,000 new jobs a year over the past decade.

That’s hardly a booming economy and it certainly isn’t likely to wipe out the demographic trends that are already affecting the province even if people like Tom Hann, Doc O’Keefe, and their developer pal  spout bullshit.